SINGAPORE: India, Iran and Russia have resumed talks on activating the International North South Transport Corridor (INSTC) that will cut freight time to Europe by half and lower the cost benefitting east and Southeast Asian exporters.
The three countries are discussing the activation of the route since 2000, through existing road-routes and with the development of some railway gaps in between the 7,200-km long multi-mode network of ship, rail and road.
The INSTC was discussed during the visit of the Iranian President Hassan Rouhani's to India in February, while Russia maintains a strong interest in the trade route, said Ambassador P S Raghavan, Convener of National Security Advisory Board in the Indian government.
"It is not only to make Indian-Russian trade or Indian-European trade profitable, it will actually make it very lucrative for East Asia and Southeast Asia exporters. There is nothing to stop the INSTC from being activated in a matter of months," said Raghavan.
He added that capacity building can be carried out, as trade volume increases and progress is made on related issues.
With no trade sanctions against Iran, the INSTC becomes "very competitive", he said.
Raghavan also informed that the INSTC cuts transportation time and cost by half as compared to the Suez Canal route.
The current route through Suez Canal involves a longer distance, and is expensive as well as congested.
The INSTC could transport exports from India's west coast, through Iran's Bandar Abbas and Chabahar ports, Central Asian states, Russia and onwards to Europe.
The customs department of Indian-Iranian-Russian have discussed trans-shipment processes while logistics such as containerisation needs to be sorted out, Raghavan said after addressing the 12th Institute of South Asian Studies International Conference on South Asia.
The conference was organised by the Institute of South Asian Studies, a think tank of the National University of Singapore.
In 2014, the INSTC had a rehearsal staged by the Federation of Freight Forwarders Association of India to tests its efficiency.
The INSTC member states recognise the potential for efficient and seamless North-South transport caused by economic globalisation and by ever-increasing trade within the Eurasia region, the forwarders had said in a report at that time.