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Virtual Regional Meeting on Sustainable Transport Connectivity

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Virtual Regional Meeting on Sustainable Transport Connectivity Virtual Regional Meeting on Sustainable Transport Connectivity between Asia and Europe on 25-26 November, 2020 International North-South Transport Corridor (INSTC) INSTC Member Countries Founder Members INDIA IRAN RUSSIA Other Members REPUBLIC OF AZERBAIJAN REPUBLIC OF TURKEY REPUBLIC OF ARMENIA REPUBLIC OF UKRAINE REPUBLIC OF KAZAKHSTAN REPUBLIC OF BELARUS REPUBLIC OF KYRGYZSTAN OMAN REPUBLIC OF TAJIKISTAN SYRIA BULGARIA (OBSERVER) Background ▪ Agreement on INSTC signed by India, Iran & Russia on 12.09.2000 ▪ INSTC – a Multi-Modal Trade Transport network connecting India with Central Asian & Eurasia countries. ▪ A dry run of the INSTC was conducted by FFFAI in 2014 where, it was found that there would be reduction in distance by 40% and in costs by 30%. ▪ Five containers transported through this route from Bengaluru to Moscow in October 2016 by Russian companies and it took 22 days to reach Moscow. ▪ The 7th meeting of INSTC Coordination Council / Expert Council Meeting was held on 4-5 March, 2019 in Tehran. Why new route? ▪ Old Route ➢Exports to Baltic States cover 16,129 km and it takes about 40-45 days. ➢Exports/ Imports from India and CIS Countries become costlier. ▪ INSTC Route ➢Lower transportation costs & transit time could make exports more competitive. ➢Open up new markets in Central Asian countries. ROUTE 1 ROUTE - II Bandar Anzali Amirabad ASTRAKHAN INSTC BAKU CIS ASTARA INCHEH BOROON AMIRABAD SARAKHS BANDAR ABBAS India – CIS Trade 35.00 30.00 25.00 15.88 16.11 20.00 12.91 Total Trade 12.12 Imports 15.00 Exports 10.00 12.88 11.92 9.32 9.44 Value in USD Billion in Value 5.00 2.79 3.01 3.47 4.19 0.00 2016-2017 2017-2018 2018-2019 2019-2020 Data Source: DGCI&S, Kolkata India – World Trade 900 844.15651 788.07032 800 769.10715 700 660.20946 600 514.07842 500 474.70928 465.58099 Exports 400 384.35703 Imports 330.07809 303.52616 313.36104 Total Trade 300 275.85243 200 Value in USD in USD Billion Value 100 0 2016-2017 2017-2018 2018-2019 2019-2020 Data Source: DGCI&S, Kolkata Data Source : DGCI&S Kolkata CIS with the World 1200.00 1066.08 1041.86 1000.00 910.09 800.00 642.37 611.50 Exports 600.00 521.15 Imports 423.71 430.35 Total Trade 388.93 Value in USD in USD Billion Value 400.00 200.00 0.00 2017 2018 2019 Data Source: ITC Trade Map Data Source : ITC Trade Map Route Distance USD/TEU USD/TEU Transit Nhava Sheva to Moscow via St.Petersburg 8700 nm 3500 5200 45 days Nhava Sheva / Moscow via Kotka 8596nm 3900 5600 45-50 days Nhava Sheva / B.Abbas 750 nm 200 300 5 Days B/Abbas/Qazwin 1461km 3 Qazvin Astara 380km 1 Astara - Yalama 504km 2 Yalama -Moscow 2260km 5 Nhava Sheva / Moscow via Bandar Abbas 4605 + sea 2100 3100 14+5 days Nhava Sheva / St. Petersburg 5566+sea 2200 3037 15+5 days Missing links/Alternative Routes ▪Qazvin-Rasht-Astara- Qazvin-Rasht Railway corridor- 160 km long - was inaugurated on 6th March’2019- The construction of the Rasht-Astara railway is expected to be completed by 2021 ▪Railway connecting Armenia and Iran –The link could provide another railway route to Russia and Europe from Armenia -shortest transportation route from the Port of Black Sea to Port in Iran and Persian Gulf. ▪Turkmenistan and Kazakhstan railway route- 444 KM-This route connect Uzen (Kazakhstan) with Gyzylgaya and Bereket (both in Turkmenistan)- Alternatively, can connect Kazakhstan and beyond from Bandar Abbas-This route can also be used from Chabahar Port (Through Mashhad and Ashgabat). ▪Between Bereket (Turkmenistan) to the nearest port on the Iran Border - 256 KM rail stretch and 82 KM missing link Inside Iran –also Iran planning to construct 95 KM missing links from Gorgan to Incheboroun- Can be used as alternative route from Bandar-Abbas to Turkmenistan and Western Kazakhstan. Advantages ▪ Most suitable route for transit traffic between Asia and Europe ▪ For South Asian & European countries, the speed of cargo transportation through INSTC will double ▪ Carriage cost - 30% less & Transit time – 40% shorter ▪ Few countries exist along the route, therefore less border crossings and easier for the countries to get into agreements, ▪ All countries signatory to TIR Convention – India has approved accession in March 2017. ▪ Ease of transit process- documentation, compliance, route can be used by both member as well as non member countries and safety of cargo will be ensured. ▪ Many regions like Asia-Europe, Iran-Azerbaijan-Russia-Georgia, Iran- Armenia-Georgia and Iran-Turkey would get connected through INSTC Route. Way Forward ▪ Setting up a Joint Venture Company along the INSTC corridor ▪ Implementation of TIR and E-TIR mechanism among all members in order to accelerate freight carriage and eliminate unnecessary procedures. ▪ A new test run along the corridor, under the TIR convention, starting from Indian ports to Russian destinations, to explore bottlenecks and deficiencies of the Corridor. ▪ Single window for Seamless movements. ▪ There is a need to have common facilitation cell in each country which should consist of the representatives from Logistics, Shipping, Legal and trade council. ▪ The potential of this corridor will be manifold and after its commencement other countries like Myanmar and Thailand would get linked by road. This will boost trade between Europe and South East Asia as well. Cont.. Way Forward ▪ Harmonisation of Customs procedures and policies. ▪ Forms in Customs to be in English and officers to be trained to communicate in English with traders. ▪ Tariff rates need to be reduced ▪ To provide sufficient containers for adequate number of days and to ensure sufficient amount of return cargo. ▪ Easing of Visa issuance ▪ Safety and security of the Cargo ▪ Easier access to banking and insurance facilities. ▪ To have an online banking system for booking full rake and to provide service within 24 hours of indent ▪ Regular train services from Bandar Abbas to Baku/Amirabad/Anzali/Astara ▪ To offer discount for INSTC movements to make the route viable for operation. .
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