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North–South Transport Corridor (NSTC)

The International North–South Transport Corridor (NSTC) will rival the Suez Canal. The NSTC is a land- and sea-based 7,200 km long network comprising rail, road and water routes that is aimed at reducing costs and travel time for freight transport in a bid to boost trade between Russia, Iran, Central Asia and India. It will link South Asia to Western and Northern Europe. The NSTC project also opens a window for alignment with Silk Road Economic Belt, a brainchild of Chinese President Xi Jinping to establish new trade and transport links with Central Asia and Europe.

In 2015, the overall cargo traffic along the International North–South Transport Corridor involving JSC Russian Railways amounted to 7.3 million tons, exceeding the level reached in 2014 by 4.1 percent, or by 0.3 million tons. Russian trade with Iran had grown by 70 percent to $855 million over the first five months of 2016. Overall trade between the two countries stood at about $1.6 billion.

The project, research showed, might provide a cost-effective alternative to the maritime route across the Suez Canal. The project was unveiled in 2000 when Russia, Iran and India signed an agreement to build the route. Other states involved in the project include Armenia, Belarus, Kazakhstan, Kyrgyzstan, Oman, Tajikistan, Turkey and Ukraine. A study, conducted by the Federation of Freight Forwarders' Associations in India showed that the NSTC would be 30 percent cheaper and 40 percent shorter than the existing routes, the Diplomat reported in May 2015.

The route was tested in 2014, with dry runs conducted between Mumbai and Baku, as well as Mumbai and Astrakhan indicating that transport costs could be reduced by $2,500 per 15 tons of cargo. Travel time cuts are even more impressive. For instance, India and Russia use maritime routes for freight transport at the moment, with goods reaching their destination in approximately 40 days. The NSTC will allow freight from Mumbai to reach Saint Petersburg in 14 days, the media outlet added, citing JSC Russian Railways.

For trade, India currently uses maritime transport to link with Russia. From St. Petersburg, the cargo has to sail around the entire western part of Europe and the Suez Canal which takes around 40 days to reach Mumbai. According to the Russian Railways Logistics, the new route cuts the time just to 14 days and eliminates the need to pass through the Suez Canal, which is not only overloaded, but also very expensive.

The ship, road and rail route connects India’s Mumbai to the Iranian port of Bander Abbas and further to Baku in Azerbaijan as well as Astrakhan, Moscow and St. Petersburg in Russia before stretching to northern Europe and Scandinavia. Besides Iran, India and Russia, countries that are on board to integrate into the transit network include Armenia, Azerbaijan, Belarus, Kyrgyzstan, Kazakhstan, Ukraine, Turkey, Tajikistan, Oman, Syria and Bulgaria.

The NSTC that Putin referred to as a "flagship project" was a key topic on the agenda of a summit involving Russian President Vladimir Putin, his Iranian counterpart Hassan Rouhani and Azerbaijan's leader Ilham Aliyev August 8, 2016. "We believe that this cooperation serves the interests of the peoples of Iran, Azerbaijan, and Russia and, of course, the interests of the entire region," PressTV quoted Iranian Foreign Minister Mohammad Javad Zarif as saying.

“Our talks will focus on a flagship project – the International North–South Transport Corridor with a total length of 7,200 kilometers,” Russian President Vladimir Putin was quoted as saying on 05 august 2016. “It aims to provide the best possible opportunities for transporting transit cargo from India, Iran, and the Persian Gulf states to Azerbaijan, the Russian Federation and further to northern and western Europe,” he said.

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Page last modified: 22-08-2016 18:36:51 ZULU