PM Modi framed the right to transit in the context of connectivity and how it could help establish reliable and resilient supply chains in the region.
Q. Why did PM pitch this?
A.
Lack of transit across Pakistan’s territory has been a challenge for India to access Central Asian markets.
Iran’s President also said that despite the impressive potential, infrastructural connections in the field of transit between members of the SCO are not so extensive.
Iran already provides special priority to the development of the North-South Corridor and has made huge investments.
Q. What is International North-South Transport Corridor (INSTC)?
A.
The INSTC is a 7,200 km-long multimodal transportation network encompassing sea, road, and rail routes to offer the shortest route of connectivity.
It was established on 12th September 2000 in St. Petersburg, by Iran, Russia and India for the purpose of promoting transportation cooperation among the Member States.
It links the Indian Ocean to the Caspian Sea via the Persian Gulf onwards into Russia and Northern Europe.
It will move freight between India, Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia and Europe.
Q. What is the Significance of INSTC?
A.
Trade facilitation: INSTC is aimed at reducing the carriage cost between India and Russia by about 30 percent and bringing down the transit time by more than half.
New corridor in making: It has the potential to transform the economies of countries along the corridor into specialized manufacturing, logistics, and transit hubs by facilitating access to newer markets.
Multimodal transit: The recent Suez Canal blockade, which cost the global economy hefty damage amounting to US$9 billion, has amplified the optimistic outlook towards the INSTC as a cheaper and faster alternative multimodal transit corridor.
Q. What are the benefits offered to India?
A.
Export promotion: The INSTC connects India with Central Asia, and Russia, and has the potential to expand up to the Baltic, Nordic, and Arctic regions, increasing the scope of trade multifold.
Ease of trade: For India, it provides a shorter trade route with Iran, Russia, and beyond to Europe, creating scope for increased economic engagement.
Alternative Route to Central Asia: It opens up a permanent alternative route for India to trade with Afghanistan and Central Asia, given the hurdles in the direct route through Pakistan.
