A big push for INSTC would be a strategic step to protect its interests in the Middle East
Post Date – 12:30 AM, Saturday – 4/1/23
A big push for INSTC would be a strategic step to protect its interests in the Middle East
India needs to step up its competition in the Middle East given the changing geopolitics in the region as a result of China’s growing influence. Beijing managed to broker a deal between archrivals Iran and Saudi Arabia, leading to the recent restoration of diplomatic relations between the two major Islamic powers. This could have far-reaching implications for international politics in general, and Asia in particular. For India, the development offers a reality check of Beijing’s growing role in shaping global events. Of particular concern is the future of the ambitious International North-South Transport Corridor (INSTC). India, Russia and Iran announced in September 2000 that this 7,200-kilometer intermodal corridor connects the Indian Ocean and the Persian Gulf, passes through Iran to the Caspian Sea, and then connects with Russia and Northern Europe. Both Iran and Saudi Arabia are important trading partners of India, and India has strong economic and strategic interests in the Middle East through INSTC. For India, INSTC is now more important than ever, and it needs to push aggressively to realize the project’s full potential. This year, India holds the chairmanship of the Shanghai Cooperation Organization (SCO). The current geopolitical turmoil and Russia’s decoupling from the West – following Russia’s invasion of Ukraine – presents an opportunity for India and the INSTC. India will benefit greatly once a seamless rail freight connection is provided to INSTC via Iran.
Mumbai could then become a trans-shipment hub for Asian exports to Europe, competing with those in China, especially as Western companies look to reduce their reliance on China and shift production to other parts of Asia. If the full potential of the INSTC as a seamless transport corridor is realized, India could also attract a large number of export-oriented manufacturing activities looking to relocate out of China. While India is wary of China’s rising influence in the region and trying to safeguard its own strategic interests in the Middle East, it can play a constructive role in promoting dialogue and cooperation between Iran and Saudi Arabia and maintaining regional stability. INSTC has opened India’s faster and cheaper access to markets in Europe, Russia and Central Asian countries. Meanwhile, India’s fast-growing economy will have easy access to hydrocarbons and other mineral resources from the largely landlocked Central Asian nation. The corridor will also allow India to import fertilizers, steel and coal from Russia and Ukraine faster and cheaper. Importing cheaper coal through this route could give India an advantage when buying coal from its traditional suppliers Australia and Indonesia. India’s strong push for INSTC now will be a strategic step to protect and advance its interests in the Middle East and attract significant foreign direct investment into the country.
