Iran, Russia and India to promote freight transit through INSTC

The founding member states of the International North-South Transport Corridor (INSTC), namely Iran, Russia, and India, gathered for the third time in Tehran on Tuesday, to discuss solutions for promoting freight transit through the newly developed international corridor.

The event, dubbed “Iran Rah” was attended by senior officials from the three countries including Iranian Transport and Urban Development Minister Mehrdad Bazrpash, Head of Iran's Ports and Maritime Organization (PMO) Ali-Akbar Safaei, Deputy National Security Advisor of India Vikram Misri, and Senior Aide to the president of the Russian Federation Igor Yevgenyevich Levitin.

Speaking at the meeting, Bazrpash underlined some of the Islamic Republic’s major principles regarding the promotion of INSTC including multilateralism, partnership, transit neighborhood, networking, facilitation of trade, and intelligent and technological development of transit, and called for maximum collaboration for the development of exchanges through the INSTC.

Further in the meeting, PMO Head Ali-Akbar Safaei mentioned some of the advantages of transit through Iran for the countries in the regions and said, “Iran's joining the Shanghai Cooperation Organization and the Eurasian Economic Union will provide unique opportunities to the country’s trade partners, and the Islamic Republic is determined to remove all its tariff and non-tariff barriers in the shortest possible time.”

The main rationale for these trilateral meetings is to promote freight transit between India and Russia and other Persian Gulf and the Caspian Sea countries, Safaei said.

Elsewhere in the gathering, Misri emphasized India’s determination to cooperate with Iran and Russia for completing the INSTC saying, “India has been a participant in various initiatives and projects regarding the north-south corridor and has always been committed to providing its resources in the best way to the implementers so that this corridor is developed in the best way possible.”

Lavitin for his part called the INSTC a humanitarian corridor and asked the countries of the region to join this corridor to achieve its goals.

He underlined the definition of a single policy for trade through this corridor as the most important requirement for the development of trade in this initiative and added, “The main issue discussed in this meeting is defining the same framework and reaching a common understanding for all the business operators that are willing to use this route.”

Established in 2000 by Iran, Russia, and India, this 7,200-km-long INSTC works as a multi-modal network of ship, rail, and road routes for moving freight between India, Iran, Azerbaijan, Russia, Central Asia, and Europe.

Geographically, Iran's territory, particularly the Chabahar port, is very strategic for the activation of the INSTC in linking India to Russia.

The INSTC is also an important transport agenda that is expected to considerably boost the transit and trade of Iran and Russia with the countries of the Caspian Sea and the Persian Gulf.

 

Iran adds 15 ships to its merchant fleet

Iran has added 15 ships to its trade maritime fleet in the Caspian Sea amid growing trade ties with Russia and other countries located to the north of Iran.

According to Mehr News Agency, the head of Iran’s Ports and Maritime Organization (PMO) has said that expanding Iran’s northern fleet of commercial vessels has become a priority for the country’s Transport and Urban Development Ministry, of which the PMO is a subsidiary.

“Given that the volume of trade with neighboring countries to the north is growing, the first priority for the ministry is to expand the fleet and to increase the capacity in the Caspian Sea,” Ali-Akbar Safaei said on Saturday.

Safaei said Iran’s Caspian Sea merchant fleet will further expand in the near future with the arrival of new ships from the Volga River.

The announcement comes amid growing shipping activity in the Caspian Sea as Russia and other countries have ramped up their exports and imports via Iran and its southern ports.

Media reports and statements by Iranian authorities show there has been a major surge in trade via the International North-South Transport Corridor (INSTC), a route that connects the Persian Gulf and the Indian Ocean to countries to the north of Iran via the Iranian road and rail transportation network.

Iran has created new infrastructure, including modern port operation systems, in its northern ports to both facilitate cargo transit via the INSTC and to increase its own exports to Russia and other countries.

Last month, Iran and Russia signed a contract to build a key railway along the Caspian Sea that would significantly boost trade via INSTC’s western branch.

 

 

India selling US dollar for UAE dirham

Reportedly Indian companies are switching from the US dollar to Asian currencies to pay for Russian coal imports. Steelmakers and cement manufacturers in India have been using the UAE dirham, Hong Kong dollar, Chinese yuan, and euro to pay for Russian coal in recent weeks.

Last month, Russia became India’s third-largest coal supplier after the South Asian giant dumped the greenback to secure deals, with imports surging to a record 2.06 million tons.

In June, Indian buyers paid for at least 742,000 tons of Russian coal using currencies other than the US dollar, equaling 44 percent of the 1.7 million tons of Russian imports that month.

Meanwhile, the Reserve Bank of India also recently approved payments for commodities in the Indian rupee, a move that could further boost bilateral trade with Russia.

Recent reports revealed that Moscow was calculating the value of oil exports to India in US dollars while requesting payment in dirhams, asking that payments be made to Russia’s Gazprombank via Mashreq Bank, its correspondent bank in Dubai.

India has increased purchases of Russian oil and coal since the start of the war in Ukraine, helping Moscow cushion the effect of western sanctions and allowing New Delhi to secure raw materials at a discount.

In early July, the Russian logistics company, RZD Logistics, announced the completion of the first transportation of goods via container trains from Russia to India through the eastern branch of the International North-South Transport Corridor (INSTC).

The INSTC, which links the Indian Ocean and Persian Gulf to the Caspian Sea via Iran, is a 7,200 kilometer-long, major international shipping route for Indo-Russian trade.

In the face of aggressive western sanctions, Russia has bolstered economic cooperation with several friendly nations. Iran and Turkey are currently working on implementing Russia’s Mir payment system into their economies.

Turkey also recently agreed to make partial payments for Russian gas in rubles, while European companies have reportedly been inquiring with Ankara about acting as a middle man to supply Russia with metals, as a way to overcome sanctions.

 

Iran, India and Uzbekistan meeting on Chabahar Port

Iran, India, and Uzbekistan are scheduled to hold their first online meeting on cooperation in Iran's Chabahar Port on Monday, 14th December 2020, the Indian Ministry of Foreign Affairs announced.

The trilateral working group meeting will be jointly chaired by Deputy Ministers of Iran and Uzbekistan and a secretary from India, Hindustan Times reported.

The announcement came a day after Uzbek President Shavkat Mirziyoyev proposed during a summit with Prime Minister Narendra Modi that a trilateral meeting should be held with Iran to promote Chabahar port.

According to the website of the Indian Ministry of Foreign Affairs, the Indian Government welcomes Uzbekistan's interest in using Chabahar port, in Southeastern Iran, as a transit port, which provides economic opportunities for traders in the region.

In addition to Uzbekistan, other Central Asian countries have shown interest in using the port.

“This would open up economic opportunities for the traders and business community of the region. Besides Uzbekistan, other Central Asian countries have also shown interest in using the port. India seeks to cooperate closely with regional countries on this issue,” the statement by the Indian ministry said.

India currently operates one of the terminals of Chabahar port and offers loading and unloading services in the mentioned terminal.

“The strategic project has been given a waiver from sanctions imposed by the United States on Iran in view of its importance in shipping cargo and humanitarian assistance to Afghanistan," the report highlighted.

Following an India-Uzbekistan Summit on Friday, Adarsh Swaika, Joint Secretary (Eurasia), Indian External Affairs Ministry, said the two sides had discussed the ways to overcome the lack of overland connectivity.

Mirziyoyev gave his in-principle concurrence to joining the International North-South Transport Corridor (INSTC) when Modi reiterated a proposal on Uzbekistan’s participation in the project.

“We would welcome any initiative that increases connectivity between Afghanistan and Uzbekistan or with other Central Asian countries,” Swaika said.

Chabahar Port, the only Iranian ocean port, is a strategic port with unique opportunities that can attract investments from Iranian and foreign private sectors.

The development of the Chabahar Port is important for the economic development of regional countries and in this regard endorsing regional agreements with neighboring countries are of significant importance for Iran so that it can increase its transit share to connect the shores of the Indian Ocean to Russia, northern Central Asia, and the Caucasus.