India and Russia plan to enhance trade via new route of Iran bypassing Pakistan?

Aftab Ahmed

Are India and Russia planning to open new trade route via Iran bypassing Pakistan? The control of Gwadar Port was given to China under China-Pak Economic Corridor (CPEC) which is part of ‘One- Belt, One-Road initiative to connect the region.

Pakistan gave control of Gwadar Port to China to make it fully operational. So, Iran gave Chabahar project to Pakistan’s rival country India. United States (US) had given waiver to India to work in Iran. Meanwhile US continued building pressure on Pakistan to stay away from Iran.

Three ports- Gwadar, Chabahar and Dubai are considered to be rival ports and many believed that insurgency in Balochistan province had been fueled by neighbouring countries to fail Gwadar Port. In such situation, Russian and India plan to promote Chabahar port to enhance bilateral trade.

Russia had also approached Pakistan to have access to Gwadar Port. Some insiders believed that Pakistani side had given green signal to Russia. Now, the question is recent move by Russia and Iran would cause a threat to Gwadar Port and CPEC?

United States (US) has been insisting on Pakistan to open land route for Indian goods to be exported to Afghanistan and Central Asian States. However, Pakistan links to addressing diplomatic row with India.

The US has also been keen to promote an alternative route to Afghanistan bypassing Pakistan. In this regard, United States (US) continued building pressure on Pakistan to shelve gas deal with Iran and in the meantime, granted waiver to India for the Chabahar project from the US sanctions against Iran.

According to RT, India and Russia plan to open new trade route via Iran. The Russian media outlet said that opening a long-pending multi-modal transportation corridor via Iran will be a big boost for bilateral trade between Russia and India, but it’s not just the economy at stake. This is a bold move against the threat of US sanctions.

India’s state-owned Container Corporation of India (Concor) and Russian Railways Logistics Joint Stock Company (RZD) have signed a Memorandum of Understanding to transport cargo between India and Russia – based on a single invoice – via the International North-South Transport Corridor (INSTC), a 7,200-km multi-modal transportation network project cutting right across Central Asia, starting in Iran and ending in Astrakhan, Russia.

“Within three months, traders from India and Russia could move goods between the two countries through Iran,” Concor chairman V Kalyana Rama said last week.

The INSTC is a trilateral project jointly initiated by Russia, Iran and India in 2002. In order to operationalize a new strategic transit route bypassing Pakistan, India connected it to the Iranian port of Chabahar and built a new route connecting four major cities in Afghanistan by the end of 2016.

In October 2017, in a “pathbreaking” move, India shipped a consignment of wheat from Port Kandla in Gujarat to Afghanistan, via Chabahar.

The sudden signing of the Russian-Indian MoU, just weeks after President Donald Trump’s historic visit to India, suggests that the US may have given just such a waiver for India – or perhaps that deepening Indo-US strategic ties may have emboldened New Delhi to move forward in activating the INSTC to connect with Russia through Iran.

In any case, trade via the INSTC will benefit exporters and importers in both India and Russia by lowering transit time and cost of transportation compared to the existing route via the Suez Canal. It will also cut down the shipping time sharply, to 25-28 days from the current 40 or so.

India and Russia are committed to expanding bilateral trade, shooting for $30 billion in annual trade volume by 2025, up from the current $11 billion, largely based on arms sales to India. The two countries are also working on an ambitious agreement for the long-term import of crude oil from Russia’s Far East region.

In another significant development, Indian Prime Minister Narendra Modi visited Vladivostok last year to sign a Memorandum of Intent for opening a maritime route to Chennai, on India’s eastern seaboard. The 10,000-kilometer sea route could enable cargo transfers in 24 days, in comparison to the over 40 days it currently takes to ship goods from India to Russia’s Far East.

Perhaps, a move by Russia and India may not be a threat. United States and Afghan Taliban have also signed peace deal under which US troops would have safe exit. After implementation of this agreement, there would be a peace in Afghanistan that would help to extend CPEC to Central Asian States and Russia opening new avenues of trade for Pakistan.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular

To Top