Makran coasts Trade development highway with Russia and India
Makran coasts; Trade development highway with Russia and India
The coasts of Makran form the communication route between Iran and the open waters and the Indian Ocean. Chabahar port, as Iran's only oceanic port in the Makran Sea, has a high capacity in activating the country's geo-economic advantages and developing trade relations with Russia and India. This advantage, along with Iran's membership in BRICS, can help define common interests with these three countries and Iran's entry into the Asian supply chain.
Introduction
According to the 5-year development plan of Makran zones, this area should account for 5% of the country's gross domestic income by 1407. In addition, the development of telecommunication and logistics infrastructure, loading and transportation of 15 million tons of goods per year from the region's ports, establishment of 5 economic driver zones, provision of 2.5% of Makran's gross domestic income from providing international financial services are other goals of this program. Currently, 8 ports are active in Makran region, and Chabahar port is important in terms of its strategic location in the north-south corridor and its ability to accept ocean-going ships. In the following, we will examine the role of Makran coast development in Iran's economic relations with these two countries.
From geopolitical suffocation to India's dependence on Makran coastal ports
India's issues with Pakistan and China, on the one hand, the recent change that took place in Bangladesh against the established government, has isolated India in terms of land routes and increased its desire to develope its maritime advantages. Due to its strategic location and access to the key ports of India, Makran's zone provide direct and active business communication. Indian investors can use these regions as a base to access wider markets in the Middle East and Central Asia. Also, Makran region can play a role as a reference for supplying energy and raw materials needed by the newly emerging economy of India. According to the statistics of 2022-2023, India has imported 31 billion dollars of oil from Russia. Completion and expansion of Iranian oil pipelines from Caspian Sea ports to Makran coasts will help to reduce energy transit costs between the two countries.The development of Makran coast can lead to the expansion of industrial and technological cooperation between Iran and India. By establishing commercial and industrial free zones on these coasts, Indian companies can cooperate in joint projects with Iran and benefit from new markets. Bilateral trade between India and Iran in the fiscal year 2022-2023 was 2.33 billion dollars, registering a growth of 21.76% over the previous year. During this period, India's export to Iran was 1.66 billion dollars (14.34% growth) and India's import from Iran was 672.12 million dollars (45.05% growth)
Ukraine crisis and changes in the market of Russian products
The crisis in Ukraine and the Western economic sanctions against Russia and the transit routes of this country have changed the market of Russian products from Europe to other regions and countries such as India, China, Central Asia and Africa. In addition, the transit sanctions imposed against Russia, the desire of this country to activate the North-South corridor in order to synchronize the transit routes with the change of the market of Russian products from the open waters of Makran coasts. With the blocking of the Black Sea route during the Ukraine crisis, India and Russia have turned to using the Chabahar port for the purpose of transiting goods and energy, which significantly reduces transportation costs.
North-South corridor is a multimodal route that has the capacity to connect Mumbai in India to Helsinki in Finland. This corridor, centered on Iran, connects the economies of India and Russia. The transportation time on this route is 25 to 30 and its cost is estimated to be 30% cheaper than traditional routes.
Conclusion
The market of Iranian products towards the big market of India and Russia have become important. These developments include:
Ukraine crisis: The beginning of Russia's special military operation in Ukraine has caused a wave of Western sanctions against Russia. This conflict, along with the obstacles and the reduction of the purchase of Russian oil and gas from Europe, has changed the strategy of the Russian energy market from Europe to China, India and other Asian customers. The conclusion of the contract for the purchase of Russian gas by Iran is a positive step in the direction of turning Iran into a gas hub in the region, which took place after the crisis in Ukraine.
7 October Hamas-led attack on Israel: The operation of Hamas military forces against the Zionist regime has had many consequences for this regime and global geopolitics. This operation has shown Israel's inability to provide its own security and, as a result, the loss of the trust of Western powers and India from this country in order to play its role as the main link of the IMEC Corridor. This corridor, linking India and the Arabian Peninsula to Europe through Israel, has been an alternative route for the Belt and Road Initiative to connect Asia to Europe. The alternative India-Iran-Türkiye route can lead to connecting India to Europe with a similar function. The realization of this route requires the development of Makran coastal ports and the activation of economic diplomacy in order to define common interests with the sides of the route.
****Iran's membership in BRICS: Iran's membership in BRICS can provide access to the large and growing markets of the member countries. This can help increase the export of Iranian products and increase foreign exchange earnings. Also, attracting foreign investment and facilitating access to financial resources and banking facilities of the BRICS group can lead to the development of infrastructure projects in the Makran region within the framework of the 5-year Makran coastal development plan.
Taking advantage of the development of relations between India and Russia requires the definition of common interests with the parties in the framework of the geo-economic advantages of the country on the shores of Makran. To help the common value chain between the three countries of Russia, Iran and India through the development of production capacities and free economic zones in the coasts of Makran.
source: tehrantimes.com