Russia initiates coal deliveries for first time to India through INSTC

Russia has sent its first coal shipments to India via train through the International North-South Transport Corridor (INSTC), according to Russia's national railway company, signalling a new direction in Russia's trade routes amidst western sanctions.

"For the first time, two trains with Kuzbass coal headed to India along the INSTC. The trains set off from the Kemerovo region. They followed along the eastern branch of the INSTC through Kazakhstan and Turkmenistan to the Iranian port of Bandar Abbas," Russian Railways said in its Telegram channel on 24 June 2024.

The INSTC, a 7,200-km multimodal network comprising railways, roads, and seaports, stretches from St. Petersburg in Russia to Mumbai in India. Initiated in the early 2000s, the development of this corridor has accelerated due to the need for Russia to reroute its trade from Europe to Asia and the Middle East amid sanctions.

While Russian coal has already significantly attracted buying interests from India due to its discounts as a result of Moscow's intention to pivot away from the EU, the adoption of the INSTC corridor is expected to further boost coal flows to this large market.

The INSTC provides a logistical advantage with a delivery time of around 23 days from Russia to India, compared to the 45-day journey via the traditional Suez Canal, according to Russian Railways.

President Vladimir Putin has emphasised the importance of establishing interconnectivity across the INSTC and initiating regular freight shipping lines. He has also mentioned the potential for a logistics hub on the African coast.

The volume of goods transported through the INSTC is projected to nearly triple over the next seven years, underscoring the corridor's growing significance in global trade.

Note: This article has been written in accordance with an article exchange agreement between SXCoal and BigMint.