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The new route to the south will give Russia colossal benefits

The new route to the south will give Russia colossal benefits

31 May 2018 LJ cover – Новый маршрут на юг даст России колоссальные выгоды
Tags: Russia, Railway, Construction, Economy, Analytics, India, Iran

The new transport corridor "North-South", which will compete with the route through the Suez Canal, is becoming more and more clear. He is heavily lobbied by India, where the end point of the route should be. But the implementation of such a project will bring especially great benefits to Russia itself, as a transit country.

Russia will soon submit a road map for the project of the international transport corridor (MTK) "North-South", said Indian Minister of Trade and Industry Suresh Prabhu. He discussed the work of the corridor at the recent St. Petersburg International Economic Forum.

In general, the transport corridor "North-South" is a route from St. Petersburg to India, the port of Mumbai (Bombay), the length of 7,2 thousand kilometers. Its purpose is to transport cargo from India, Iran and other countries of the Persian Gulf to Russian territory through the Caspian Sea and further to Northern and Western Europe. India is extremely interested in this project. "The absence of a viable trade route" is one of the main obstacles to the development of bilateral trade relations between Russia and India, the Indian minister believes.

Today, goods from India to Russia go mainly through Europe and China, which is expensive and time-consuming. As a result, the supply of many goods becomes simply impossible. "For example, I know that there is a demand for Indian fruit in Russia. However, due to the fact that these products are classified as perishable, they are not the main component of the trade basket of our two countries, "- explained the Minister of RIA Novosti.

Now the goods from India to the European part of Russia go mainly by sea and also back - from St. Petersburg they go around the western part of Europe through the Suez Canal. As a result, delivery of cargo from the port of Nava-Sheva (Mumbai) to Moscow is about 40 days. The new route goes directly from St. Petersburg to Moscow, then to Astrakhan, Baku and Bandar Abbas (a port city in the south of Iran on the Persian Gulf) in Mumbai. Used sea, rail and road transport.

"North-South" will reduce the time of delivery of goods from Russia to India at least 30-40%, and reduce the cost of logistics. Indian customs officials believed that this way reduces the time of delivery from India to Russia from 35 to 17 days in comparison with the route through the Suez Canal - the Bosporus and the Dardanelles.

"Even from a cost perspective, trial run showed a decrease in costs by about 30%. Double advantages in the form of reduced cost and faster delivery create favorable conditions for trade "

concluded Prabhu.

The idea of ​​creating such a route appeared in the 90-ies. In 2000, Russia, Iran and India signed an agreement on the MTK "North-South", a couple of years later, it joined other participating countries - Azerbaijan, Armenia, Belarus and Kazakhstan. However, the development of the project stalled after Iran fell under Western sanctions, and only after they were withdrawn it breathed new life. Two years ago, the foreign ministers of Azerbaijan, Iran and Russia agreed to do business. finally, the implementation of the project.

And now you can do it pretty quickly, and you will not even need much money. After all, the main infrastructure has already been built during the last 15 years. In Russia, everything is already there. The only thing is that Russia needs to develop ports in the Caspian, which is being implemented within the framework of the program. The new railway line, which connects Astara with the Azerbaijani cities of Astara, Rasht and Qazvin, is almost ready. On the territory of Iran, the construction of the Kazvin-Rasht railway is being completed.

"The railway from the Iranian port of Bandar Abbas to Qazvin already exists, the Astara-Astara road between Iran and Azerbaijan is also available. And in three years the last section of the corridor "North-South" Astara-Resht will be built, after which the corridor will be able to earn in full force, "says the first vice-president of the Russian Union of Engineers Ivan Andrievsky. "In Iran and Azerbaijan, the terrain is complex, so the problems with the implementation of the route in these countries were quite understandable, now the existing infrastructure needs to be rolled over, improved, and made logistics cheaper."

A new round of sanctions against Iran this time is unlikely to stop the project. This inexpensive and fast route for Iran now, on the contrary, becomes even more urgent. In light of the fact that the US once again wants to shackle the country in sanctions shackles, the best ally in the trade plan for Iran than Russia, which is also under the sanctions hail, you can not imagine.

It is clear that all the participants of the project will benefit, including Azerbaijan. It is planned that at the first stage, 5 million tons of cargo will be transported by "North-South" each year, and after five six years - more than 10 million tons in both directions.

Finally, this corridor will open new markets for Russia. In this regard, it is extremely interesting to expand trade relations with the rapidly growing Indian market. Politically, relations between countries are excellent. India is the largest buyer of Russian weapons, actively working with Rosatom. However, India is now a less important trading partner for us economically than the same China or Germany. And in the opposite direction, the same situation - Indian products are little known and present on the Russian market.

After a recession in the crisis, trade between Russia and India began to recover. If in 2015 year it amounted to 7,8 billion dollars, then in 2017 year it grew up to 9,3 billion. India delivers to Russia mainly medicines, in second place - industrial equipment and equipment, followed by non-clothes, electronics and computer equipment. Among the Indian imports are also auto parts, tea, tobacco.
Russia has a positive trade balance with India. But the trade in traditional goods with India is in its infancy. After all, the basis of our exports are military cargo. Also we transport reactors and equipment to India. Last year, however, Russia began to increase its traditional exports. The supply of coal is growing, exports of oil, oil products, grain and sunflower oil have appeared, although so far in relatively small amounts. Therefore, the potential for the growth of Russian exports due to the new route is simply enormous.

"This transport corridor has a lot of economic and geopolitical advantages, both for Russia and for India. The "North-South" corridor will reveal the export opportunities of Russia. For example, it will increase grain exports to the Middle East and Asia-Pacific two times. It is also important that the corridor will raise the political and economic weight of Russia in the region. On the other hand, the Indian goods market is huge. And thanks to the route, Delhi will be able to save significantly on the delivery of goods to Russia and Europe, "the expert concludes.

Olga Samofalova
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