India-Russia trade via new route almost doubles – official

Shipments of goods using the International North South Transport Corridor (INSTC) reportedly increased substantially last year

Trade between India and Russia using the International North South Transport Corridor (INSTC) almost doubled last year, according to Russian Railways official Dmitry Kryukov, as quoted by the Economic Times. New Delhi is increasing the volume of exports via the route as it looks to reduce its substantial trade deficit with Moscow, he added.

“The net cost of the service along the eastern route of the INSTC last year was reduced by more than 56%, while the volume of transportation across this route increased by 1.7 times,” said Kryukov, who is deputy general director for multimodal services at Russian Railways Logistics. An Indian government report last month also noted a significant increase in maritime activity, with a 43% rise in vessel traffic and a 34% growth in container traffic during the financial year 2023-24.

Currently, it takes more than a fortnight for goods from Moscow to reach the port of Bandar Abbas in Iran, Kryukov noted. Speeding up railway delivery from Russia through Turkmenistan and Kazakhstan to Bandar Abbas is a significant shortcut for the Eastern branch of the INSTC, “which is one of the key focus areas,” he said.

The INSTC originates in Mumbai, traversing through Iran’s Bandar Abbas, Bandar-e-Anzali, and Chabahar, before crossing the Caspian Sea to reach Astrakhan in southern Russia. It then connects to Moscow and St. Petersburg via rail and road links.

In May 2024, India and Iran signed a ten-year agreement for the operation of Chabahar Port, which is seen as a strategic gateway to unlock India’s trade potential with Central Asia, Russia, and European countries. Indian Ports Global Limited will invest around $120 million in upgrading Chabahar’s port infrastructure as part of the agreement.

The INSTC facilitates trade between India and Russia, with India exporting goods such as construction supplies, clothing and footwear, rice, plastics, rolled iron, confectionery, seasoning, and food concentrates to Russia, Kryukov told the Economic Times. Russia exports paper products, lumber, hygiene products, furniture, roofing materials, food, and other types of goods, he stated. Additionally, according to Kryukov, the INSTC can help diversify bilateral trade between Russia and India, with the pharmaceutical industry being a promising area for growth. The eastern route of the corridor is now equipped to handle Indian pharmaceutical products that require “specialized transportation conditions” and is particularly “significant given that India became the largest supplier of pharmaceuticals to Russia in 2023,” the official added.

Russia and India have achieved a significant milestone in their bilateral trade, reaching a record $66 billion in 2024. The two countries are poised to meet their ambitious target of $100 billion in trade by 2030, having already made substantial progress. However, the trade deficit currently stands at around $25.11 billion.

RM https://www.rt.com/india/612146-chabahar-port-traffic-surge/