Enhancing India's Economic Integration with Eurasia: The Strategic Role and Evolving Dynamics of the International North–South Transport Corridor (INSTC)

Abstract

India’s ambition to become a global economic powerhouse is increasingly linked to its ability to diversify export routes and secure a stable supply of energy resources. The International North–South Transport Corridor (INSTC) has emerged as a pivotal multimodal network that connects India to Russia, Europe, and Central Asia via Iran. By offering a route that is up to 40 percent shorter and 30 percent cheaper than traditional maritime channels such as the Suez Canal, the INSTC represents both an economic and strategic alternative amid rising geopolitical uncertainties and logistical bottlenecks. This paper synthesizes insights from extended gravity model analyses, policy briefs, and empirical studies to examine the evolution, operational challenges, and future prospects of the INSTC. Data from recent sources indicate that while India’s exports to INSTC member countries stood at approximately US$20 billion in 2022, there exists a latent potential estimated at nearly US$180 billion if infrastructural and regulatory challenges are resolved. The analysis reveals that the corridor not only reduces transportation costs and transit times but also fosters network spill overs through the creation of regional logistics hubs. Moreover, in a geopolitical landscape marked by sanctions on traditional trade routes and emerging alternatives such as China’s Belt and Road Initiative (BRI), the INSTC offers a counterbalance that enhances India’s strategic autonomy. Policy recommendations include accelerating intermodal infrastructure investments, harmonizing customs and regulatory procedures, and devising innovative financial mechanisms to overcome banking and insurance challenges. Overall, the INSTC is positioned as a transformative enabler that can reshape regional integration, boost export competitiveness, and reinforce India’s energy security.