Daily Current Affairs : 1-July-2024

In current tendencies, India and Russia have strengthened their trade ties, marked by the first-ever shipment of Kuzbass coal from Siberia to India via the International North-South Transport Corridor (INSTC). This milestone is a significant step in improving bilateral trade and boosting the efficiency of global logistics.

What is the INSTC?

The International North-South Transport Corridor (INSTC) is a multimodal transportation network connecting countries in Europe, Asia, and the Middle East. The corridor spans over 7,200 kilometers and integrates sea, road, and rail routes. It is the shortest route from St. Petersburg, Russia, to Mumbai, India, offering a more efficient way to move goods between these two countries.

Why is the INSTC Important?

The INSTC is part of Russia’s broader strategy to redirect its trade flows from Europe to Asia and the Middle East, especially in light of the Western sanctions imposed on Russia. These sanctions have pushed Russia to seek alternative routes and partners to sustain its international trade and economic growth. The INSTC offers a practical solution by bypassing Europe and facilitating smoother trade between Russia and its new and existing partners.

Benefits for Multiple Countries

The INSTC is not just beneficial for Russia and India but also for several other countries. The corridor connects:

  • Iran – A key player as the corridor passes through its territory.
  • Azerbaijan – An essential transit hub between Russia and Iran.
  • 11 Central Asian countries – These nations benefit from quicker trade routes to Europe and India.
  • Baltic and Nordic countries – These countries can use the corridor to gain better access to the Middle East and South Asia.
India-Russia Trade and the Role of the INSTC
Courtesy: Geopolitical Monitor

Important Points:

India-Russia Trade Strengthened: The first-ever shipment of Kuzbass coal from Siberia to India marks a significant step in improving trade relations between India and Russia.

What is the INSTC?:

  • The International North-South Transport Corridor (INSTC) is a multimodal network connecting Europe, Asia, and the Middle East.
  • It spans over 7,200 kilometers, integrating sea, road, and rail routes.
  • It provides the shortest route from St. Petersburg (Russia) to Mumbai (India), improving trade efficiency between the two nations.

Importance of the INSTC:

  • The corridor is part of Russia’s strategy to redirect trade from Europe to Asia and the Middle East due to Western sanctions.
  • The INSTC offers a bypass to Europe, helping Russia maintain global trade and economic growth.

Benefits for Multiple Countries:

  • Iran: A crucial player in the corridor, as it is a key transit route.
  • Azerbaijan: Serves as an important transit hub between Russia and Iran.
  • 11 Central Asian countries: Gain faster access to trade routes with Europe and India.
  • Baltic and Nordic countries: Have improved access to the Middle East and South Asia.

Why In News

India-Russia trade has advanced significantly with the first-ever shipment of Kuzbass coal from Siberia to India via the International North-South Transport Corridor (INSTC), marking a major milestone in both nations’ economic cooperation and showcasing the growing importance of this new trade route.

MCQs about India-Russia Trade and the Role of the INSTC

  1. What is the primary function of the International North-South Transport Corridor (INSTC)?
    A. To connect European countries via sea routes
    B. To provide a shorter route for trade between Russia and India
    C. To link Russia and China through railways
    D. To connect India and the Middle East via roadways
    Correct Answer: B. To provide a shorter route for trade between Russia and India
    Explanation: The INSTC is a multimodal network that connects Europe, Asia, and the Middle East, with the shortest route between St. Petersburg, Russia, and Mumbai, India, facilitating efficient trade between the two nations.
  2. Why is Russia focusing on the International North-South Transport Corridor (INSTC)?
    A. To increase trade with the United States
    B. To redirect trade flows away from Europe due to Western sanctions
    C. To develop new trade agreements with African countries
    D. To enhance tourism between Russia and India
    Correct Answer: B. To redirect trade flows away from Europe due to Western sanctions
    Explanation: The INSTC is part of Russia’s strategy to find alternative trade routes and partners, especially after facing economic sanctions from Western countries, redirecting trade toward Asia and the Middle East.
  3. Which of the following countries does not benefit directly from the International North-South Transport Corridor (INSTC)?
    A. Iran
    B. Azerbaijan
    C. China
    D. 11 Central Asian countries
    Correct Answer: C. China
    Explanation: While Iran, Azerbaijan, and several Central Asian countries benefit from the INSTC, China is not directly involved in this specific corridor, which focuses on connecting Russia, India, and other countries in the Middle East and Central Asia.
  4. What is the significance of the first-ever shipment of Kuzbass coal via the INSTC?
    A. It marks the beginning of China’s involvement in the corridor
    B. It highlights the growing trade ties between Russia and the European Union
    C. It is a milestone in strengthening India-Russia trade relations and demonstrates the potential of the INSTC
    D. It signals a shift from sea routes to air freight for international trade
    Correct Answer: C. It is a milestone in strengthening India-Russia trade relations and demonstrates the potential of the INSTC
    Explanation: The shipment of Kuzbass coal marks a key moment in enhancing bilateral trade between India and Russia and highlights the growing role of the INSTC in facilitating smoother, more efficient trade routes between these countries.

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