After their leaders pledged to strengthen bilateral trade and military cooperation at a bilateral summit last month, Russia and India announced earlier this week that they had sealed a long-discussed $6 billion arms deal despite threats of economic sanctions from Washington. And in the latest indication of the increasingly close relationship between the two countries, Iran, Russia and Iran announced on Thursday that they would meet next month to work out the details of a massive project to open up a new sea-land transport corridor that would that would be a cheaper and shorter alternative to shipping oil and other goods through the Suez Canal.
According to RT, the North-South Transport Corridor (INSTC), the name for the new transit route, will connect India to Russia and Europe via a combination of sea routes and an overland passage through Iran, according to Iranian state-owned news outlet Press TV. The 7,200-kilometers long corridor will reduce the time and costs of shipping by up to 40%. Transport time between Mumbai and Moscow will fall to 20 days. The annual capacity of the transport artery is expected to reach 30 million tons.
Indian logistics companies presently need to route shipments through China, Europe or Iran to access Central Asian markets. Already, routing shipments through Iran is the least time-consuming option. But the INSTC will have the ancillary benefit of allowing Indian companies to forge a new trade route to Afghanistan without having to travel through Pakistan, as tensions over Kashmir are once again on the rise. The passage corridor through the Persian Gulf will mean billions of dollars in trade for Afghanistan, cutting its dependence on foreign logistics.
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