The Trade Corridor That Connects Russia, Iran, India & Azerbaijan

Mon 24 Dec 2018 06:49 GMT | 10:49 Local Time

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By Seymur Mammadov

From about the second century BC until the 14th century AD, the famed Silk Road or Silk Route linked China with the Mediterranean, crisscrossing China, India, Persia, Arabia and onto the European side. While the main item of transport was silk, it also saw commerce of items such as spices, grains, precious stones, fruits and vegetables.

With trade and commerce increasingly dictating the course of bilateral and international relations, countries and regions are now investing in developing trade corridors for easy transportation of goods and commodities. In Eurasia, for example, there is a convergence of countries’ positions in the implementation of global projects, particularly the development of new international transport corridors.

Thus, multi-modal transport corridors such as the East-West, North-South, Trans-Siberian, the Northern Sea Route – are under development. More and more Eurasian countries are taking concrete steps to develop their transport and logistics infrastructures to become participants in these transport corridors.

The main participants in the development of international transport corridors in the Eurasian region –are Russia, China, and India. If Russia is actively promoting its transport routes – the Trans-Siberian Railway and the Northern Sea Route, then China is engaged in developing the New Silk Road, and India the North-South corridor.

The key objective of these countries is to enable their markets to gain easier access to the European markets, so much so that every year finds the competition among the three nations is intensifying. In recent years, the North-South international transport corridor, which is designed to provide transport links between India, Russia, Iran, Azerbaijan and Northern Europe, has attracted increasing attention.

While the idea of developing the North-South transport corridor originated in 1993, the agreement for the purpose was signed among Russia, India and Iran only on in September2000. Azerbaijan joined the project in 2005. Armenia is also interested in the project, but its participation doesn’t look feasible for various reasons.

Later, more than a dozen countries joined the agreement on the North-South international transport corridor, many of which claim to be of a transit nature. But the Western sanctions against Iran have created difficulties for the project; after the lifting of the sanctions in January 2016, the project again acquired its significance.

The length of the North-South transport corridor is 7200 km, a substantial part of which passes through the Russian railway network. The core direction for the Russian side in the North-South framework is: Buslovskaya – St. Petersburg – Moscow – Ryazan – Kochetovka – Rtishchevo – Saratov – Volgograd – Astrakhan which is 2513 km long.

On its southern stretch, the North-South corridor has several routes of freight using rail transport: The first is the Trans-Caspian route – using the Russian seaports of Astrakhan, Olya, Makhachkala and the ports of Iran, like Bender-Enzeli, Nouchekhr and Bender- Amirabad. The western branch of the corridor is a direct rail link through Russia, Azerbaijan and Iran, while the eastern branch of the corridor is a direct rail link through Kazakhstan, Uzbekistan, and Turkmenistan, with access to the Iranian railway network.

Commercially, the main advantage of the North-South transport corridor over other routes (in particular, the sea route through the Suez Canal) is in reducing, by two or more times, the distance of transportation, as well as reducing the cost of transporting containers compared with the cost of transportation by sea. If cargo transportation by sea through the Persian Gulf, the Suez Canal, the Mediterranean Sea to Helsinki takes 45-60 days, then along the North-South corridor the delivery time will be 20-25 days.

The commissioning of the new Rasht-Astara (Iran) -Astara (Azerbaijan) railway, which is the last missing link of the direct railway route along the western branch of the North-South transport corridor, will be of great importance for the development of this important trade route. Once this project is fully operational, India will be able to transport its goods through Iran along all the three branches of the North-South corridor to the markets of the Baltic States and Northern Europe. Simultaneously, European countries will be in a position to transport their goods along this corridor towards Iran, Azerbaijan, and India.

At present, Russia, India, Iran and Azerbaijan are actively cooperating in the construction of the North-South transport corridor, with Moscow, New Delhi and Baku helping Teheran to improve their railway infrastructure. After the US’s withdrawal from the agreement due to the Iranian nuclear program and the resumption of US sanctions, Iran has faced difficulties in financing several projects within the North-South framework. According to Iranian officials, Russia has already allotted 3 billion euros (3.4 billion dollars) to Iran to tide over this difficulty and help build the railway.

In January this year, Iran and India signed an agreement worth $ 2 billion on cooperation in the railway sector. New Delhi has also committed to investing $ 500 million to develop the Iranian port of Chabahar. Another project partner, Azerbaijan, has approved a loan of $ 500 million for Iran to build the Astara-Rasht railway and to equip it with the required infrastructure.

These constructive steps taken by Russia, India and Azerbaijan will help to speed up the completion of the North-South strategic corridor; when the project is eventually commissioned, it will significantly increase the volume of trade among Russia, India, Iran and Azerbaijan. The North-South Road will then, hopefully, recapture the magic of the bygone centuries as a vibrant corridor of not merely trade and commerce but of the transit of peoples and cultures.

 

Seymur Mammadov, is the director of the international expert club “EurAsiaAz” and editor-in-chief of the Azerbaijani news agency Vzglyad.az

Copyright: The Madras Courier, the first newspaper published in Madras, Madras Presidency, British India

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