INSTC takes up role as energy corridor: Russian coal to head to India

Image: ANP/EPA. Hotli Simanjuntak

Russia is planning to ship coal to India along the International North-South Transport Corridor (INSTC). India has long been interested in establishing trade with Russia along the corridor, and cooperated with Iran for that purpose. The collaboration is now bearing fruit, as the INSTC is taking up its role as an energy corridor between Russia and India.

Russian coal will be travelling southward along the INSTC and reach Iran’s Bandar Abbas port on the Indian Ocean. From there, the coal will be shipped overseas to Indian ports. Russian officials announced the plans at the St. Petersburg International Economic Forum on Friday 7 June.

Iranian-Indian cooperation

Iran and India have sought deeper ties as both countries take an interest in the development of the INSTC. India is primarily interested in establishing a trade corridor to Russia that bypasses rival Pakistan. Russia’s announced coal exports signal some success in India’s pursuit of its ambitions.

Iran, for its part, is interested in attaining the strategic role of transit country and benefitting from the subsequent financial gains. A boost in relations with its large near-neighbour India is also key for sanctioned and isolated Iran.

Image: Shutterstock/Peter Hermes Furian.

Chabahar port

To further develop the INSTC and boost throughput capacity to its ports, India acquired the southern Iranian port of Chabahar. The port is an important infrastructure node for India to boost connectivity with Russia, Central Asia and Europe while bypassing Pakistan. Since 2003, it has spent over 100 million dollars on the construction of the port.

The Chabahar port is not yet fully operational. Iran is still building a 700-kilometre railway that will connect the port to the country’s railway network at the city of Zahedan. Such a connection could boost the attractiveness of freight transportation through the port and along the INSTC, for which the port will be an end point.

Iranian shipper

Reportedly, Iranian shipping company IRISL is facilitating the Russian – Indian trade. The company announced that it had allocated 300 containers to ship of trade goods between its two partners. The company also said that it would allocate more containers as demand grows, according to Iranian and Indian media.

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Author: Dennis van der Laan

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