The International North-South Transport Corridor (INSTC) was initiated as a 7,200 kilometer promising multimodal route connecting India and Europe via Iran, Azerbaijan, Russia, and Central Asia. For Russia, it was a worthy bet to play as new exploitable markets opened up in South and Central Asia, and with sanctions in play, it helped in diversification of its supply chains.
In order to reap the benefits of the INSTC, the Prime Minister of Belarus Roman Golovchenko strongly hinted during a meeting of the Eurasian Economic Union (EAEU), that he wishes Belarus’ stronger presence along the route. In his words, “all EAEU member states should be actively involved in the INSTC project” in the context of “rearranging logistics corridors”.
Glovchengo showed some self-restraint despite his explicit request for a stronger Belarusian presence across the INSTC. “Development prospects of our economies depend on whether logistics is functioning well and whether it is adapted to new geopolitical realities”, he said.
However, he didn’t shy away from pointing that the INSTC needs some more work on the infrastructural side and the New Development Bank established within the BRICS framework should be able to help. Looking at India’s growing influence within the BRICS group and the INSTC, it is evident that a stronger collaboration between the EAEU and BRICS will be beneficial for the development of missing infrastructure along the ‘golden route’. Also, since Russia, China and India are close trade partners with each other, it is highly likely that the New Development Bank may step in.
Another possible way to look at it is that BRICS would not get too involved in the INSTC because India’s growth and increasing influence (gaining momentum because of the INSTC) will mean that China’s Belt and Road Initiative may just be jeopardised.
The members of the EAEU i.e. Armenia, Belarus, Russia, Kyrgyzstan, and Kazakhstan are either already a part of the INSTC or will shortly be involved. They are, in fact, advocating the development of infrastructure along the INSTC.
After the Russian invasion of Ukraine and the consecutive sanctions by the West, Central Asia has become a much more relevant region for the European economy. Especially when it comes to natural resources and agricultural products, countries like Kazakhstan and Uzbekistan, for instance, are becoming increasingly important. Companies involved in rail logistics highlight that Central Asia is a new and relatively untapped market that could help the industry and the European economy reduce its dependence on Russia and China.
In such a situation, the ‘golden route’ will prove to be extremely beneficial in Europe’s efforts to tap into the Asian markets, thereby, restructuring the world’s supply chains. Undoubtedly, the EU should not forego any investment opportunities arising from the Asian markets gaining prominence and should widen the scope of its trade relations.