Moreover, India can also use the INSTC to move in oil and gas, fertilizers, minerals and metals that it is short of, from the Eurasian and Central Asian countries in a cost-efficient manner.Ĭhabahar is also an interesting and viable prospect for Iran as its main sea port, Bandar Abbas, which accounts for over 85 percent of its merchandise trade, is not a deep-sea port and large ships can't dock there. are turning protectionist and creating new trade barriers for competitively priced imports from emerging economies like India. These infrastructural developments will also make it commercially lucrative to ship merchandise to the largely untapped Eurasian region when traditional markets such as the EU and the U.S. Therefore, the INSTC, along with now partly functional Chabahar port and related transport links, will open up an access to mineral rich but landlocked Afghanistan and other central Asian republics such as Tajikistan, Turkmenistan and Uzbekistan while bypassing a direct but virtually unavailable land route through Pakistan that doesn’t provide transit trade facilities to India. Separately, India has already built the Zaranj-Delaram highway, which is well connected to major cities in Afghanistan including Kabul, Herat and Kandahar. Besides, it is also funding a rail road project to link Chabahar to Zahedan on the Iranian border, which will further be extended to Zaranj in Afghanistan. India has already invested $500 million in the development of Chabahar port in the Persian Gulf and also has plans to invest an additional $16 billion in Chabahar free trade zone. The INSTC and the India-EEU free trade deal can provide the much needed negotiating platforms to address economic barriers. Two-way trade, which at present stands at $11.9 billion (FY2017-18) according to India’s Department of Commerce, is far below potential and currently suffers from inefficient logistics and a series of tariff and non-tariff barriers that need to be addressed on priority. The bilateral trade and investment relationship can get a further boost if India can also expedite its free trade pact (which is currently under negotiation) with the Eurasian Economic Union comprising Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia, which has a combined GDP of over $4 trillion at purchasing power parity (PPP), by substantially improving the traders’ margins. The substantially reduced shipment time, and in turn, reduced freight charges, will likely give a big boost to India’s economic engagement with the largely untapped Eurasian and Central Asian region, by making trade more efficient and cost-effective for manufacturers and traders. Once operational, the INSTC will cut the time taken in moving cargoes through the traditional route (from JNPT, Nhava Sheva, Mumbai via the Suez Canal, the Mediterranean Sea and the Strait of Gibraltar to Saint Petersburg, Russia) from 30 days to 20 days, according to an assessment by India’s Ministry of Commerce and Industry. The 7,000-kilometer transport corridor will connect Iran, Azerbaijan and Russia along the Caspian Sea and provide a shorter and cheaper route for shipping merchandise to Russia, and potentially to West European nations than the one in use today. However, it is not without its challenges. This ambitious project – if successfully implemented – could have a significant impact on businesses in the region, lowering transportation costs, and boosting trade and commerce. While China is aggressively pushing its ambitious Belt and Road Initiative (BRI) to export its surplus capital and merchandise, India is slowly and steadily moving on an alternative network of sea and rail routes called the International North South Transport Corridor (INSTC), in partnership with Iran.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |