Corridor linking South Asia with Europe high on Narendra Modis agenda

Written by HumaSiddiqui | New Delhi | Updated: Jun 14 2014, 05:47am hrs
In keeping with New Delhi's ambition to increase its share in global trade, the government is fast-tracking a proposal to link South Asia with Europe by sea, rail and roads. The trade route spanning Central Asia, the Caucasus and Russia -- the unique North-South Transport Corridor (NSTC) -- is high on the Narendra Modi government's agenda.

Soon after the Budget session is over, the government is going to launch India shows in key countries of CIS to regain significant trade ground in the former member states of the erstwhile USSR. Also known as the Eurasian countries, they are quite rich in natural resources like oil, natural gas, metals & minerals and are a useful source of several other raw materials of considerable importance to India's manufacturing industry.

According to officials, the NSTC will not just improve relations with CIS countries, but also reduce cost of exports to Europe. Apart from environmental anf commercial importance, this international transport corridor has a tremendous strategic significance, they said.

Interestingly, Nisha Desai Biswal, the Obama administration's pointperson for South and Central Asia, who recently concluded her visit to New Delhi, had talked to Indian officials about regional trade linkages along the New Silk Road and the Indo-Pacific Economic Corridor.

The NSTC is a freight route connecting South Asia to Europe via ships, trains and trucks. India, Russia and Iran had agreed to develop the route in 2001.

First, goods are shipped from India to Iran by ocean, from where they move to southern Russia across the Caspian Sea or by truck/rail.

Then, goods are transported by trucks or trains, along the Volga through Moscow to Northern Europe.

According to Ajay Bisarya, joint secretary, Eurasia, ministry of external affairs, to improve the connectivity with the CIS countries, we are setting up an e-network with hub in India and its spokes in CIS in the field of tele-education and tele-medicine.

Indian experts feel this route is more realistic as it skips Pakistan. Security issues associated with the neighbouring country are one of the main reasons why the gas pipeline projects have failed to progress despite numerous meetings between officials of all countries.

With India using the sea route to reach Iran, bypassing Pakistan, it is considered a more practical route. But global concerns about Iran could be one of the stumbling blocks over its development.

India's access to Central Asia states through the North South corridor will not only enable it to meet its energy requirements and ensure its energy security, it will also will impact major commodities like oil, gas, uranium and other metals at a cheaper import cost for the country. Russia, at the centre of the NSTC, will have a tremendous economic and strategic advantage, gaining a conflict-free entry into the Persian Gulf and the Middle East, which will allow for changing the strategic setup and the balance of forces not only in the region, but also in the whole world.

Once the deal is complete, NSTC will offer very competitive rates for shipment via the Suez Canal, slashing costs and shipment time between South Asia, Russia, Northern Europe and the Persian Gulf. For example, it costs $3,500 to ship a 20-foot container from Germany or Finland to India via the Suez Canal, while the cost would be about 30% less through NSTC, said an analyst.