India, Iran, Russia want to create alternative trade route to Suez Canal

11:17 PM | 1 Nov, 2018
India, Iran, Russia want to create alternative trade route to Suez Canal
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TEHRAN - Russia, India and Iran will meet later this month to discuss the operation of the 7,200-km International North-South Transport Corridor (INSTC), which is seen as "a cheaper and shorter alternative to the traditional route through the Suez Canal," according to the Iranian news agency.

The International North-South Transport Corridor (INSTC), a multimode network of sea and rail routes, will link the Indian Ocean and the Persian Gulf via Iran to Russia and North Europe.

The project comes in the backdrop of China’s multi-trillion-dollar One Belt One Road initiative. Within Iran, the two routes overlap in a potential boon to future businesses.

New Delhi has been actively courting Tehran, given the utmost importance it attaches to the route and Iran has been receptive.

Once operational, the corridor will allow India to send its goods to Bandar Abbas in Iran by sea, from where they will be transported to Iran’s Bandar Anzali on the Caspian Sea by road. Next, they will be shipped to Astrakhan in Russia and transported into Europe by rail.

The route will cut the time and cost of delivering goods by about 30 percent to more than 40 percent. Compared with the Suez Canal, the corridor will reduce the transport time between Mumbai and Moscow to about 20 days. The estimated capacity of the corridor is 20 to 30 million tonnes of goods per year.

India’s Union Commerce and Industry Minister Suresh Prabhu on Saturday met a Russian business delegation in New Delhi, where he said: "all issues may be resolved in order to operationalize the (INSTC) route as early as possible."

An official statement said India, Russia and Iran will hold a trilateral meeting on November 23 to make the route operational soon, Indian media reported Tuesday.

"The INSTC is the shortest multimodal transportation route linking the Indian Ocean and the Persian Gulf via Iran to Russia and northern Europe," India’s Ministry of Commerce and Industry said in the statement.

To access resource-rich Central Asia, India has to route its goods either through China, Europe or Iran. The routes through China and Europe are long, expensive and time-consuming, with Iran being the most viable one.