On Saturday, June 11, 2002, the News Agency of the Islamic Republic of Iran (IRNA) announced that the pilot operation for the new trade route (International North-South Transport Corridor (INSTC)) connecting North-Eastern Russia with India via Iran was in progress. Its first pilot test transit began with the transit of forty-one tonnes of wood leaf. The transit operation is being conducted in cooperation between Iran’s shipping representative office in the International Transport & Shipping Ltd. (ITS) and logistical companies of the Islamic Republic of Iran Shipping Lines in India. The shipping agreement allows the use of a bill of lading for the entire trip, which reduces shipping costs, bureaucracy and waiting times (https://en.irna.ir/news/84784416/Iran-kicks-off-pilot-transit-via-North-South-Corridor).
The aim of the new trade route is to make alternative trade routes through the Suez Canal, the Mediterranean Sea, the Atlantic Ocean and the North Sea useless. In addition, to deactivate in practice any US sanctions imposed on Iran, by joining even more countries Iran for trade with it.
The two containers weighing a total of 41 tonnes will first make their way from St. Petersburg to the Caspian Sea. After arriving by boat in the northern Iranian port of Anzali, they will be transported by truck via Iran to the Persian Gulf port of Bandar Abbas and then shipped to the Indian port of Nhava Sheva. The trip is expected to last 25 days.
This 22-year-old initiative aims to connect the Caspian Sea to the Indian Ocean and Persian Gulf via Iran – connecting major ports and dramatically reducing transit times compared to alternative routes via the Suez Canal, Mesopotamia Canals and North Sea.
The INSTC, which started in India, Russia and Iran in 2000, now includes Azerbaijan, Armenia, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkey, Ukraine, Belarus, Oman and Syria.
Iran’s INSTC ambitions include the construction of a railway line from the Caspian Sea to the southeastern Iranian port of Chabahar. A much more ambitious vision requires the construction of a canal that will directly connect the Caspian Sea with the Persian Gulf. Stretching 750 miles north-south, the Caspian Sea is the largest inland body of water in the world, covering an area larger than Japan.
Under pressure from the US, India stopped buying Iranian oil in mid-2019. Prior to that, India was Iran’s second largest customer, after China. Negotiations for the resumption of the Iran nuclear deal have reached a deadlock.
India, which pursues a strategy of autonomy, imports oil from Russia amid sanctions on Russia over its war with Ukraine, could explore a similar decision point for Iran, opening up huge opportunities for trade and cooperation between the two countries.
If India were to be exempted from sanctions on Iran, other countries might follow suit. It is noted that India has established stronger economic ties with Saudi Arabia and other Gulf states. In what could be a complementary development, Iran has been seeking reconciliation with Saudi Arabia through five rounds of talks hosted by Iraq.
Iran has very good relations with China and Russia. It has begun to open in other Gulf states. If India compromises with Iran, it will create a huge bloc of countries, money, population and power, which could then make it very difficult to keep Iran locked up and properly sanctioned by the West.
