Vessel traffic along the International North-South Transport Corridor (INSTC), a strategic trade route developed by India, Russia, and Iran, surged by 43% in the 2023-24 financial year, according to a recent Indian government report. Container traffic also saw a significant increase of 34% during the same period.
The data was revealed in the latest Economic Survey, an annual report released ahead of India’s federal budget announcement. The survey highlights increased maritime activity through the Shahid Beheshti Port at Chabahar, Iran, which serves as a crucial link between Mumbai and Eurasia under the INSTC framework.
In May 2024, India and Iran signed a ten-year agreement to operate Chabahar Port, strengthening their partnership in regional trade. The deal follows eight years of cooperation and aims to enhance connectivity between India, Central Asia, Russia, and Europe, bypassing traditional shipping routes such as the Gulf of Aden-Suez Canal.
Under the agreement, Indian Ports Global Limited will invest approximately $120 million to upgrade Chabahar’s port infrastructure. Additionally, India has offered a $250 million credit line for projects jointly identified with Iran’s Port and Maritime Organization to boost trade efficiency.
Chabahar Port, Iran’s first deep-water facility, plays a pivotal role in the INSTC, a multimodal trade corridor linking the Indian Ocean and the Persian Gulf to the Caspian Sea, and further extending to northern Europe through Iran, Azerbaijan, and Russia. Experts suggest the corridor will allow India to bypass Pakistan and strengthen its foothold in Central Asian markets, where China has been expanding its presence.
Officials from India, Russia, and Iran estimate that the INSTC will cut transit times by 40%, reducing average journey durations from 45-60 days to just 25-30 days. Additionally, freight costs are expected to decrease by 30%, making trade more cost-effective.
The INSTC has gained renewed significance amid Western sanctions on Russia and Iran, which have disrupted global shipping routes and increased transport costs. The corridor offers an alternative for India and Russia to maintain stable trade flows despite geopolitical challenges.
Besides Chabahar, India has also revived the Eastern Maritime Corridor (EMC), linking Russia’s Far East with India’s southeastern coast. The Chennai-Vladivostok sea route, which historically facilitated Soviet-Indian trade, is expected to enhance the transportation of vital commodities such as oil and coal.
