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Russia Pushes for INSTC


INSTC UPSC: Relevance

  • GS 2: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.


INSTC corridor: Context


INSTC review: Key points

  • The President has described is as a truly ambitious project despite China hard pressing BRI (Belt and Road Initiative) as a mega connectivity initiative in the Eurasian region.
  • In the recently held 6th Caspian Summit 2022, the president described INSTC as a “transport artery from St Petersburg to ports in Iran and India”.
  • A few days ago, Russia sent consignments for India from St Petersburg via the Caspian port of Astrakhan and the Iranian Port of Anzali and from there to Bandar Abbas Port and thereafter to Western Indian ports to operationalise INSTC.


Russia Pushes for INSTC_3.1


Russian interest in INSTC

  • Russia is looking for an opportunity to start new businesses amid the crippling Western sanctions that are taking a toll on its economy.
  • Moreover, Russia’s most industrially advanced state of Ryazan was looking for more economic cooperation with India.


What is INSTC?

  • INSTC members: INSTC is a 7,200-km-long multi-mode network of ship, rail, and road route for moving freight between India, Iran, Afghanistan, Azerbaijan, Russia, Central Asia and Europe.
  • The primary objective of the NSTC project is to reduce costs in terms of time and money over the traditional route currently being used.


Russia Pushes for INSTC_4.1


INSTC significance

  • Reduced time and cost: One of the primary objectives the transport model is it will reduce the time taken to send the consignments from one country to another, which will eventually reduce the cost,
  • Russia Ukraine war: The Russian invasion of Ukraine and the subsequent sanctions against Russia have led to an exodus of Western businesses from the country, which in turn has given an opportunity to India to fill up the economic vacuum.
  • Increase trade with Russia: India’s exports to Russia stood at $3.24 billion in 2021-22, up from the pre-pandemic figure of $3 billion. Meanwhile, imports from the country have risen to $9.86 billion. INSTC will further ensure more overland trade with Russia.
  • Counter Chinese traders: In the wake of outflow of western companies from Russia, Chinese traders are rushing to enter the Russian market. INSTC has the ability to make India a significant global player.
  • Expands market: The route is also part of India’s overall efforts to establish greater connectivity and trade with the high-potential markets of the adjoining Commonwealth of Independent States (CIS) countries.
  • Bypasses Pakistan: INSTC provides a route to India that ensured an opening to global supply chains and trade networks while bypassing Pakistan.


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