Trade between India and Russia, utilizing the International North South Transport Corridor (INSTC), has doubled in the past year, according to The Economic Times.
India increased export volume to mitigate its trade deficit with Russia. The INSTC's eastern route, connecting western India with Russia through Iran, is considered the most efficient of the corridor's three branches.
Dmitriy Kryukov, deputy general director for multimodal service, Russian Railways Logistics, stated, "Speeding up the railway delivery from Russia through the territory of Turkmenistan and Kazakhstan to the port of Bandar Abbas in Iran allows to cut the general time of delivery across the Eastern branch of INSTC."
Kryukov also noted, "Today it takes nearly 16 days for a train to get to Bander Abbas from Moscow region and 11 days from Russia's Chelyabinsk region, which is three times faster than two-three years back. The net cost of the service along the eastern route of INSTC last year was reduced by more than 56%, while the volume of transportation across this route increased by 1.7 times."
Indian exports via the INSTC eastern route include construction supplies, clothing, footwear, rice, plastics, rolled iron, confectionery, seasoning, and food concentrates. Russian exports to India consist of paper products, lumber, hygiene products, furniture, roofing materials, and food.
Bilateral trade between the two nations reached USD 66 billion in 2024, a fivefold increase over the past five years, with a 9 percent rise in the last eight months. The trade deficit stands at approximately USD 25.11 billion. Both countries aim for a USD 100 billion trade target by 2030.
Kryukov said, "Diversification of bilateral trade between Russia and India can be addressed by INSTC. Pharmaceuticals are among the most prospective industries in this respect. Today the eastern route of the corridor is ready to accept Indian pharmaceutical products that require special conditions of transportation. This logistics option can prove to be timely and relevant, taking into consideration the fact that India was acknowledged the largest supplier of pharmaceuticals to Russia in 2023."
Russia and Iran are expected to sign an agreement by March-end to commence construction of the Rasht-Astara rail link, which will enhance India-Russia trade via INSTC.
In 2023, Russia and Iran signed an agreement to build the rail link, completing the western INSTC route via Azerbaijan. The INSTC also includes the Trans-Caspian route, connecting ports in Astrakhan, Olya, and Makhachkala in Russia with ports in Bandar Anzali, Amirabad, and Nowshahr in Iran. A proposed route via Armenia and connections to the Northern Sea Route are under consideration.
Russian Railways Logistics is a subsidiary of Russian Railways, it specializes in providing multimodal logistics services, including rail, sea, and road transportation.
INSTC (International North South Transport Corridor) is a multi-modal transportation network spanning 7,200 km connecting ship, rail, and road routes for moving freight between India, Iran, Azerbaijan, Russia, Central Asia and Europe.