Iran, India plan to route Russian trade through Chabahar Port

India and Iran plan to step up operationalizing the International North-South Trade Corridor (INSTC) in a move to boost trade with Russia.

Following up on earlier agreements, a trial shipment to test trade links from Russia to India will be attempted in the next 6-8 months, Mohammad Miri, an advisor to the Chabahar Free Zone in Iran said, according to Mint.

The shipment will go through the strategically vital Chabahar Port, while an earlier shipment in 2022 went through the more established Bandar Abbas Port.

The INSTC was conceptualised in 2001 as a new trade corridor to boost economic linkages between India, Central Asia, and Eastern Europe. According to a study by the Centre for Air Power Studies, an Indian think tank, numerous efforts have been made to reboot the INSTC.

A dry run was conducted in 2014 in an effort to iron out problems along the corridor. After this, a draft transit and customs agreement was agreed in 2015. This was followed by another trial run of the corridor from Russia to India in 2022. According to Miri, the previous test runs used the Bandar Abbas port in Iran to allow the goods to reach India.

The next trial run, which is currently being planned, may go through Chabahar, where India operates berths in the Shahid Behesti Terminal.

In an effort to develop this new route, Iranian officials have also proposed linking free trade zones between Chabahar and an Indian port to make trade easier.

The proposal was made by the Managing Director of the Chabahar Free Trade Zone in a meeting with Indian Ambassador to Iran Rudra Gaurav Shresth this week, said the trade zone’s officials in a meeting with Indian journalists in Iran.

A top-level ministerial meeting is planned in January 2024 in Chabahar to push this operationalization forward. India has also hosted regional countries for “Chabahar Day" meetings in the past.

The principal difficulty with pushing the INSTC forward will be the strict sanctions that have been imposed on both Iran and Russia by the West.