North-South Transport Corridor Increasingly Important Amid Red Sea Crisis

The talks between Indian Foreign Minister S. Jaishankar and Iran's minister of roads and urban development follow a meeting between Iranian President Seyyed Ebrahim Raisi and Indian Prime Minister Narendra Modi in August last year on the issue.

According to a press release at the time from the Prime Minister's Office, "the two leaders reiterated their commitment to further strengthen bilateral cooperation, including to realize the full potential of Chabahar Port as a connectivity hub”.

INSTC Project Revitalization Key Amid Red Sea Crisis

“In light of the Red Sea crisis, the significance of the International North-South Transport Corridor (INSTC) project has increased, and the Indian external affairs minister discussed with Iran the need for revitalizing the INSTC project,” said Commodore RS Vasan (Retd), director general of the Chennai Centre of China Studies to Sputnik India.

Iran is notably hesitant to abandon the initiative, Vasan emphasized, “as the project not only serves as a lucrative source of income but also facilitates maritime passage, contributing to additional revenue generation."

The expert noted that "Iran must persist in this endeavor". He explained that the progress of the International North-South Transport Corridor (INSTC) project had been halted due to the prevailing geopolitical circumstances and ongoing developments in the Middle East. However, he mentioned that following the crisis and diplomatic visits, efforts are being made to resolve the bottlenecks.

Strategic Steps Forward

“Attaining success requires promoting a level of civility in the Middle East, which is a considerable challenge given the ongoing issues between Israel and Hamas, the intricate dynamics involving Iran and Syria, and the complexities with the Houthis. These factors present significant obstacles to the revival of the INSTC” he noted.

Despite prior efforts, India’s ships traversing the region have not gained the expected momentum, the commodore pointed out.

INSTC 40% Shorter and 30% More Economical Than the Suez Canal

From the perspective of India, Vasan mentioned that “This pathway not only allows for circumventing Pakistan while establishing connections with Central Asia and Russia but also facilitates the cost-effective transportation of goods to European markets. Moreover, Indian exports stand to gain a competitive edge with reduced costs and faster delivery times”.

The port of Olya, Astrakhan Region, is the destination of the international transport corridor North-South in Russia.

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US Sanctions and Emerging Threats in West Asia

However, the Commodore argued that sanctions will play a large role in its development.

“Persisting US sanctions will continue to play a significant role, hindering substantial advancements in promoting the INSTC. Furthermore, recent developments in the Middle East pose a substantial setback to maritime initiatives," he noted.

Vasan further indicated that goods and resources meant for India are currently being rerouted around the Cape of Good Hope, which adds an extra 10 to 12 days to their journey, instead of taking the direct route.

He highlighted that, as per recent reports, insurance costs have significantly increased, reportedly tripling or even quadrupling.

"These pressing challenges are currently impeding the revitalization of the INSTC," he concluded.

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