The North-South trade corridor was conceived during a conference on transport in Saint Petersburg on September 12, 2000. An agreement in this regard was signed by India, Russia and Iran. In 2005 Azerbaijan became a member followed by Belarus, Bulgaria, Armenia, Kazakhstan, Kyrgyzstan, Oman, Tajikistan, Turkey and Ukraine. The objective of the corridor is to reduce the time of delivery of goods from India to Russia, as well as to Northern and Western Europe. Indian goods are transported to the Iranian port of Bandar Abbas on the Persian Gulf and shipped across the Caspian Sea for onward rail/road transport to Russia, Europe and Central Asian States. The corridor is the best alternate to Suez Canal route which is 16,000 kilometers long which follows Gulf of Aden, Red Sea, Mediterranean Sea, Baltic Sea and Saint Petersburg (Russia) in 40 days. The new corridor is 7,200 kilometers long and has a multimodal transportation network which includes sea, rail and road routes. The corridor is 30 percent cheaper and 40 percent shorter than old route.
Iran has already facilitated India with a route to Afghanistan and Central Asia via the Port of Chabahar. On completion, Chabahar port will be connected with INSTC. This is known as India, Iran and Afghanistan corridor which will give India an alternative sea and land route to Afghanistan. Iran’s objective is to strengthen its position in Central Asia to counter Saudi and Turkish influence. During the time of Ashraf Ghani in Afghanistan, India constructed a 218-kilometer long Zaranj-Delaram Highway worth $150 million. The highway connects Kandahar in the South, Ghazni and Kabul in the East, Mazar-i-Sharif in the North and Herat in the West. At that time the objective of this project was to counter and bypass Pakistan to link Central Asian Republics for trade and linking it with Chabahar port. Another objective was to reduce Kabul’s dependence on the Karachi port and to allow India to ship its goods to Afghanistan and Central Asian Republics.
At present despite India’s best efforts to influence Central Asian Republics, it has not succeeded. China has great influence over the Central Asian Republics, so India has little room to work its charm. Pakistan and Uzbekistan have planned a 600-kilometer railway corridor from Termez in South Uzbekistan through Mazar-e-Sharif, Kabul, Peshawar to the Pakistan ports of Arabian Sea. Besides, Pakistan provides the shortest energy corridor to republics and can have access to Central Asian markets.
The new corridor is also being viewed as India’s answer to the Chinese Belt and Road initiative (BRI). India has concerns over CPEC and is attempting to sabotage the project while trying to counter Chinese influence in Central Asia. The new corridor has connected Russia with the Gulf region, the Indian Ocean and Europe. Iran is facilitating Indian interest as New Delhi is investing $635 million to develop Chabahar port with direct access to Indian Ocean. The port of Chabahar is 300 kilometers from Gwadar port as India sees Gwadar as part of Chinese encirclement of India. The new corridor (INSTC) has provided India access to Baltic, Nordic and Arctic region. In the INSTC, all the members less India are members of BRI. Pakistan can also benefit from the corridor if Gwadar is linked with Chabahar and Zahedan from Taftan through railway line to connect with Europe. It is up to the government of Pakistan to take a decision in this regard. The success of INSTC is linked with the continuation of sanctions on both Iran and Russia. Any further sanctions may jeopardize the success of entire corridor.