Trade between India and Russia through the International North-South Transport Corridor (INSTC) has doubled over the past year, as New Delhi ramps up exports in an effort to reduce its significant trade deficit with Moscow.
The INSTC connects western India to Russia through Iran. Among its three branches, the corridor’s eastern route has emerged as the most convenient in terms of both trade volume and geographical coverage.
“Speeding up railway delivery from Russia via Turkmenistan and Kazakhstan to Iran’s Bandar Abbas port has significantly reduced overall transit time along the eastern route of the INSTC,” Dmitriy Kryukov, deputy general director for multimodal service at Russian Railways Logistics, told the Economic Times from Moscow.
“At present, it takes approximately 16 days for a train to reach Bandar Abbas from Moscow and around 11 days from Russia’s Chelyabinsk region, which is three times faster than it was two or three years ago,” Kryukov said.
“The net cost of transporting goods along the eastern route of the INSTC dropped by more than 56% last year, while the volume of goods transported increased by 1.7 times.”
Indian exports to Russia via this corridor include construction materials, clothing, footwear, rice, plastics, rolled iron, confectionery, seasonings, and food concentrates.
Russian exports to India along the same route comprise paper products, lumber, hygiene products, furniture, roofing materials, food items, and various other goods, according to Kryukov.
Bilateral trade between India and Russia has reached a record USD 66 billion in 2024, marking a fivefold increase over the past five years, with a 9% rise in the last eight months of 2023.
Both nations are on course to achieve their ambitious target of USD 100 billion in trade by 2030. However, India’s trade deficit with Russia currently stands at around USD 25.11 billion.
“The diversification of bilateral trade between Russia and India can be facilitated by the INSTC,” Kryukov noted. “Pharmaceuticals are among the most promising sectors in this regard. The eastern route of the corridor is already equipped to handle Indian pharmaceutical products that require specialised transportation conditions. Given that India was the largest supplier of pharmaceuticals to Russia in 2023, this logistics solution is both timely and relevant.”
Last month, the Economic Times reported that Russia and Iran are set to sign an agreement by the end of March to commence construction of the Rasht-Astara railway segment of the INSTC, a move that is expected to further enhance trade between India and Russia.
In 2023, Russia and Iran had signed an agreement to construct this railway link, which remains the only missing section required to complete the western route of the INSTC through Azerbaijan.
Follow us
