Proposed North-South Transport Corridor not just BRI rival

Indian Prime Minister Narendra Modi’s recent visit to Russia saw the two sides sign several agreements. Among the more significant was a general framework agreement under which Russia will set up two more nuclear reactors – the fifth and sixth – at the Kudankulam Nuclear Power Plant in Tamil Nadu state.

Quite unlike its efforts to secure nuclear reactors from other countries, which have met with little concrete success so far, India’s civilian nuclear cooperation with Russia has been fruitful. The agreement signed at the St Petersburg meeting between Modi and Russian President Vladimir Putin reaffirms this.

And yet the visit was disappointing.

In the run-up to the visit, there were expectations in the Indian media that the two leaders would use their meeting to provide a push to the International North-South Transport Corridor project.

But that did not happen. The St Petersburg Declaration devoted just a single sentence to the INSTC project. Even that merely affirmed rather blandly India and Russia’s commitment “to build effective infrastructure” for the project.

The INSTC project envisages a network of sea, rail and road routes linking the Indian Ocean and Persian Gulf with the Caspian Sea through Iran and then onward to St Petersburg in Russia and northern Europe.

Faster, cheaper

The current route used to transport cargo from ports on India’s west coast to Russia, for instance, runs through the Suez Canal and the Mediterranean Sea and onward to the Port of Rotterdam in the Netherlands, where it is offloaded and hauled overland to St Petersburg. Cargo via this route takes 45-60 days to reach Northern Europe and Russia.

Under the proposed INSTC route, Indian cargo would head to the Port of Bandar Abbas, Iran, from where it would be carried overland by road and rail through Central Asian and Eurasian countries to Russia and beyond. According to a study by the Federation of Freight Forwarders’ Associations in India, the 7,200-kilometer-long INSTC route is not only 40% shorter than the Suez route but would cut transportation costs by 30%.

It was in 2000 that India, Iran and Russia came together to sign the INSTC’s founding agreement. Since then 10 other countries including Azerbaijan, Armenia and Kazakhstan have come on board.

Unfortunately, the project moved at a snail’s pace for several years. It was hampered by the international sanctions imposed on Iran. That roadblock was removed when these sanctions were lifted last year.

The project has begun moving forward of late; some dry runs have been conducted over the past year. Still, it would benefit from some revitalization, and Modi and Putin could have provided it with an energetic push.

However, they did not.

Modi should have taken the initiative to boost the INSTC project, especially in the wake of India’s decision to stay out of China’s Belt and Road Initiative (BRI).

Countering BRI

Indian analysts are calling on Delhi to come up with its own answer to BRI, and the INSTC project is widely seen in India as having the potential to counter the Chinese project.

Of course, the INSTC project is much smaller in scope and ambition than the BRI; the latter is aimed at connecting some 60 countries across Asia, Africa and Europe. But the INSTC project could grow too and should not be seen merely as an India-Russia trade and transit link via Iran.

For instance, with India and Iran coming together to develop Chabahar Port in southeastern Iran and their joining hands with Afghanistan to sign a trade and transit corridor agreement last year, another port on the Makran coast in Baluchistan will be available for use in addition to Bandar Abbas. Integrating Chabahar into the INSTC project would not only make this deep-sea port available to the INSTC but would add to the economic viability of the project.

Besides, the INSTC need not terminate at India’s ports. With India developing overland routes through Myanmar and Thailand, the corridor could extend to and through Southeast Asia.

The challenge before India now is to fast-track the INSTC project. It cannot afford to ignore opportunities to accelerate the project as it did at the St Petersburg summit.

But importantly, India need not accelerate the INSTC with a view to taking on the Chinese. “Without necessarily becoming engaged in direct conflict or competition with China’s BRI,” INSTC could be developed as a complementary corridor.