Domestic Economy

12m Tons of Russian Goods to Transit via Iran to India

12m Tons of Russian Goods to Transit via Iran to India
12m Tons of Russian Goods to Transit via Iran to India

Following India’s External Affairs Minister S. Jaishankar's visit to Moscow in November, Russia and Iran have agreed to allow the passage of 12 million tons of Russian goods via Tehran.
The goods will be transported through the International North-South Transportation Corridor. The decision has come as a result of the efforts of Russia and India to increase goods trade and boost economic partnership, especially amid the ongoing war between Russia and Ukraine, Asian News International reported on Tuesday.
An agreement was reportedly signed by Iran’s Deputy Transport and Urban Development Minister for Transportation Affairs Shahriar Afandizadeh and Russia’s Deputy Minister of Transportation Dmitry Zverev.
After the agreement was signed, the first freight train arrived at Iran's Sarakhs in Khorasan Razavi Province near the border of Turkmenistan and this marked the official launch of the eastern section of INSTC. 
The train, carrying 39 containers of goods, left Chekhov on July 6 and travelled 3,800 km through Kazakhstan and Turkmenistan before entering Iran. This train will carry the containers to Bandar Abbas in southern Iran and then head for India's Nhava Sheva Port via seaways. 
In July, Iran and Russia had signed an agreement for transiting 10 million tons of Russian goods through Iran. The transit of Russian goods crossing Tehran was also addressed in Jaishankar's visit to Moscow. 
“We discussed ways of expanding and diversifying our cooperation, moving beyond traditional areas,” he said.
“The promotion of inter-regional cooperation has been a key priority for us, particularly with the Russian Far East. We also discussed enhancing connectivity, including through the International North-South Transportation Corridor as well as the Chennai-Vladivostok Eastern Maritime Corridor. I updated [Russian Foreign] Minister [Sergey] Lavrov and deputy PM [Denis] Manturov on India's flagship initiatives, including Atmanirbhar Bharat, i.e., self-reliant India and Make in India, that can serve as platforms for a more contemporary economic relationship between our two countries,” as per the press statement from India’s Ministry of External Affairs. 
Such goods consignment will surely boost trade relations with Russia, which has been a long-time trade partner.



Chabahar Port Development to Boost INSTC

Iran’s Deputy Foreign Minister Ali Bagheri-Kani has said that the development of Chabahar Port is important for the completion of the International North-South Transportation Corridor. 
There has been a flurry of engagements between India and Iran this year, with a focus on strengthening connectivity mechanisms, especially INSTC and Chabahar Port, Indian business daily The Economic Times reported last week.
Iran is central to India’s plan to increase engagement with Russia and Central Asia, besides the rest of Eurasia. Russia, Iran and Azerbaijan are reportedly entering into a trilateral arrangement to smoothen the functioning of INSTC. The corridor has led to a massive increase in India-Russia trade this year. 
Iran’s exports to India increased by 35% year-on-year to $361 million in the first seven months of 2022, the bulk of which were food items. In the January-July period, India’s exports to Iran surged by 54% year-on-year to $1.243 billion. 
In late May, the then Iranian ambassador to India said the two countries are trying to diversify the channels of payments to expand bilateral trade. 
India is expanding its maritime partnership with Iran alongside recent moves to boosting infrastructure in the strategically located Chabahar Port. The two sides have signed a memorandum of understanding on Mutual Recognition of Seafarer’s Code of Conduct for Unlimited Voyages coinciding with a visit of ports, shipping and waterways minister, Sarbananda Sonowal, to Iran. This will include training courses for Iranian seafarers in India. 
The MoU will open new vistas of cooperation in the Western Indian Ocean Region, as both India and Iran are Indian Ocean Rim (IOR) Initiative states, said people aware of the matter. India is eying a trilateral maritime cooperation involving Oman and Iran in the long run. 
The Iranian government is also ready to conclude a long-term contract with India, prioritizing the development of transit of goods through Chabahar Port. This contract will also aim at ramping up activities of INSTC. 
Sonowal had visited the Shahid Beheshti Terminal in Chabahar Port to hand over six mobile harbor cranes to the Indian Ports Global Limited in Chabahar Free Trade Zone at the port. During the visit, the two countries decided to form a joint technical committee for the smooth functioning of the port. 
Chabahar Port is likely to act as a catalyst for unlocking the huge trade potential in the region. India has pitched to link the port with INSTC for the optimum use of Central Asian states and other Eurasian states. The corridor is expected to provide an option parallel to China’s Belt and Road Initiative. There are also plans to link INSTC with the Northern Sea route via the resource-rich Russian Arctic. India is also pitching to connect Chabahar Port with Southeast Asia and East Asia. 



Kazakhstan Seeks Share of Booming Russia-Iran Cargo Traffic

Kazakhstan wants to handle greater volumes of cargo moving between Russia and Iran, a senior Kazakh official said on Monday, an increasingly important trade route as Russia's isolation over its invasion of Ukraine grows, Reuters reported.
Iran, also targeted by Western sanctions over its nuclear program, has become a key ally for Russia, providing it both with much-needed goods and access to Persian Gulf ports from which Russian goods can reach Asia.
Kazakhstan, a former Soviet republic, has distanced itself from Moscow politically, but Russia remains its biggest trading partner and Deputy Prime Minister Serik Zhumangarin said Astana was keen to boost its transit role in INSTC between Russia and Iran.
“Such shipments can either travel via the Caspian Sea or move by railroad to the east of it through Kazakhstan and Turkmenistan,” Zhumangarin said at a meeting with Russian officials, which presidents Vladimir Putin and Kassym-Jomart Tokayev attended via video link.
"During the first nine months of this year, 80,000 tons of cargo have been shipped along this route, which is an eightfold increase from last year, although the corridor's capacity allows for 6 million tons of shipments [annually]," he added.

The deputy premier said reducing red tape and improving infrastructure could streamline cargo flows.
Tokayev met Putin in Moscow on Monday in his first foreign trip since he secured a second term in a snap election on Nov. 20.
Zhumangarin also said Kazakhstan was considering building a third railroad crossing on its border with China, which move could be regarded as either positive or negative for Russia, depending on where the added volumes go.
The Central Asian nation is in talks with the European Union about boosting its transit capacity as part of a project to divert China-Europe cargo traffic from Russia to the Caspian Sea and the Caucasus.

Add new comment

Read our comment policy before posting your viewpoints