The Rasht-Astara Railway is becoming a critical part of India’s strategy to boost its global trade, especially as the world faces increasing challenges like the Red Sea crisis. Russian President Vladimir Putin recently emphasized the importance of this railway and the broader International North-South Transport Corridor (INSTC) during his visit to Azerbaijan. This massive transport project aims to connect South Asia, Russia, and Europe, and could be a game-changer for India’s trade routes.
Why is this Railway Important?
The Rasht-Astara railway covers 162 kilometers and is the missing piece of the INSTC puzzle. This corridor, originally signed by India, Russia, and Iran back in 2000, has since grown to include more countries from across Eurasia. It’s designed to connect India’s major ports, such as Kandla and Chabahar, to Russia, Iran, and beyond, making the trade of goods like oil and gas faster and cheaper. The ultimate goal is to bypass longer, more expensive routes, like the one through the Suez Canal, which has become increasingly risky due to conflicts like the Houthi attacks in the Red Sea.
Expert Opinions on the Railway’s Potential
Russia’s interest in the Rasht-Astara railway is crucial. For Russia and Iran, this railway is the key to accessing India’s massive market, especially as Western sanctions make it harder for them to trade with other regions. The INSTC will connect India directly to Russia and Iran, opening up faster, more efficient trade routes.
The corridor is shorter and cheaper compared to traditional routes, which is why India is so invested in it. Since the Suez Canal was temporarily blocked in 2021, which caused chaos in global shipping, India has been looking for better alternatives like the INSTC.
Challenges Along the Way
While this sounds promising, there are still several hurdles to overcome. Infrastructural issues, customs red tape, tariffs, and financial barriers all stand in the way of the project reaching its full potential. But, once these challenges are addressed, the INSTC could lead to massive growth in landlocked Eurasian countries, turning the region into a major energy hub.
In the long run, a fully functioning INSTC combined with a Free Trade Agreement between India and the Eurasian Economic Union could push India’s trade with countries like Russia past $100 billion. This would deepen India’s ties with Eurasia and open up even more opportunities.
Geopolitical Roadblocks
Despite the potential, there are geopolitical hurdles. Ongoing sanctions against Russia and Iran, and instability in countries like Afghanistan, raise questions about how quickly the corridor can be fully operational. Yet, India remains committed to this long-term project, especially as it looks for ways to strengthen its ties to Central Asia, Russia, and even Europe. The Arctic route has also been discussed as a possibility for future connections.
Chabahar Port and Future Prospects
India has long championed the INSTC because it connects Chabahar Port with Central Asia, Russia, and potentially Europe. Despite delays due to the Ukraine conflict, this project remains a top priority for India and regional stakeholders like Iran and Azerbaijan. Once completed, the corridor will improve trade in oil, gas, and other goods between South and Central Asia, helping to lower costs and reduce transit times.
The Rasht-Astara railway is especially vital for India because it establishes the necessary links to access Central Asia’s rich oil and gas resources. Goods can travel from Kandla Port in Gujarat to Chabahar in just four to five days, and then be distributed across Central Asia and beyond through a network of railways and roads. This will make the entire process faster and more cost-efficient.
Growing Trade Through the Caspian Sea
Recent developments have shown the importance of the Caspian Sea route, which is part of the eastern segment of the INSTC. In 2023, this route transported around 650,000 metric tons of goods for the first time, and the total cargo volume across the Caspian Sea jumped to 10 million metric tons in 2023, up from 6 million in 2022.
This growing trade through the Caspian Sea highlights just how important the Rasht-Astara railway will be in the future. According to Russian officials, the railway is expected to transport 15 million metric tons of goods annually once it’s fully operational.
India’s Commitment to Global Trade
Despite the challenges, India is fully committed to seeing the Rasht-Astara railway and the broader INSTC succeed. India’s dedication to globalization ensures that it will continue to invest in these trade routes and seek new partnerships to expand them. Discussions with Russia about connecting to the Arctic route are ongoing, and as these projects come to fruition, India’s role in global trade could expand significantly.
The Rasht-Astara railway and the INSTC are not just about improving transportation—they are part of a larger strategy for India to strengthen its global trade ties, reduce dependence on risky routes like the Suez Canal, and tap into new markets across Eurasia. With the potential to connect India with regions as far-reaching as Europe, Central Asia, and Russia, these initiatives could reshape global trade and bolster India’s economic future.
