Chennai Vladivostok Maritime Corridor to expand trade horizons for India and Russia

In recent news surrounding the Vladivostok Port in Russia, China was given the right to run the Port after a humongous gap of 163 years, by the Russian Prime Minister Mikhail Mishustin. The ‘eastern dragon’ will be operating the Port as the official transit point of China, to supply natural gas via the Far east gas pipeline route, which ends in Vladivostok, starting 1st June. 

However, if sources are to be believed, Russia is rooting for India to expand its presence across the Port and its activities and engage further via the Chennai-Vladivostok Maritime Corridor, which could give a huge boost to maritime ties between the two countries. 

On the other hand, Sarbananda Sonowal – India’s Cabinet Minister for Ports, Shipping and Waterways – recently inaugurated a slew of projects worth INR 148 crore to uplift the Chennai and Kamaraj ports. These projects are aimed at developing infrastructure at the Ports, thereby, enabling them to handle 100 million MT cargo and aid hassle-free evacuation of cargo.

Source – The Economic Times

The Chennai Vladivostok Maritime Corridor stretches over 7,000 kilometers, connecting the eastern coast of India with the Far East region of Russia. The Corridor opens up a plethora of opportunities for trade and investment for both the countries. India has also expressed interest in building a satellite city near Vladivostok, and there is also a possibility of launching a trans-Arctic container shipping line and processing facilities along the Northern Sea Route.

The Corridor is expected to play a pivotal role in improving the trade relations and overall supply chain operations between the two nations, reducing transit times as well as cost of logistics. Let’s take a look at a few benefits that the project may render for both the countries – 

Trade and Economic Cooperation:

The Corridor will provide an efficient and shorter bilateral trade route between India and Russia. Conventionally, maritime trade between the two countries took place on a longer route that passed through Europe and the Suez Canal, but that is going to change with a direct sea route that facilitates increased trade volumes. The existing route starts with the Nhava Sheva Port in Mumbai to the Port of St. Petersburg in Russia and covers more than 8,500 nautical miles. However, on the proposed route, the ships will end up traveling only about 5,600 nautical miles. 

Access to New Markets:

The Corridor will facilitate trade not only between India and Russia, but will also open new markets for both the countries Southeast Asia and Europe. The strategic location of the Port of Chennai on the Bay of Bengal makes it an ideal gateway for trade with Southeast Asian countries like Thailand, Vietnam, and Indonesia. Similarly, The Port of Vladivostok in Russia provides access to the resource-rich Far East region, offering immense opportunities for Indian businesses to tap into the market sectors like energy, mining, and technology.

Strengthening Regional Integration:

The Government of India has bigger, better plans for the Chennai Vladivostok Maritime Corridor. There are proposals to link it with other existing and other proposed connectivity initiatives in the region, such as the International North-South Transport Corridor, the ASEAN-India Maritime Transport Cooperation Agreement, and Russia’s Trans-Siberian Railway. This integration would create a comprehensive network of transportation and trade routes, facilitating seamless and efficient supply chains in both the continents. 

Energy Security:

It is known that Russia possesses abundant natural resources, including oil, gas, and coal, and India’s energy demands, that continue to grow rapidly, are met with Russian energy products. The corridor presents an opportunity for India to diversify its energy sources by importing natural resources from Russia’s Far East region, thereby reducing its dependence on Middle Eastern countries, as well as ensuring a more secure, stable energy supply chain.

Infrastructure Development and Employment Opportunities:

An obvious outcome of the Chennai Vladivostok Maritime Corridor Project is the significant infrastructural development in both the countries, which will especially help India to realise its aspirations of world-class supply chain infrastructure. This includes development of not only both the Ports but overall the sectors of maritime shipping, road and rail transportation, as well as logistics facilities. 

Apart from these benefits, the Corridor is going to create huge long-term employment opportunities in both countries. The project is highly aspirational and will end up having a positive impact on the economic and social well-being and growth of both the countries, and the connected regions. 

Last year, Russia offered India “leasing and building large-capacity ships” as insurance on Russian oil amid the G7 price cap on its energy purchases. In 2021, India and Russia had decided to focus on the area of civilian shipbuilding to facilitate enhancement of interaction and specialist training, investments in shipbuilding and repair, scientific research, development of intelligent transport and navigation systems, and international transport corridors. 

Leave a Reply

Your email address will not be published. Required fields are marked *

LATEST NEWS