INSTC Proves 'Silver Lining' Amid Global Food Crisis
Kyiv: Since the beginning of the Ukraine conflict, food prices have been increasing globally as Russia and Ukraine are both key exporters of cereals, however, the expansion of the International North-South Transport Corridor (INSTC) has proved to be a bright spot and its existence is now being treated as a priority.
Both Ukraine and Russia are chief exporters of cereals with as many as 50 nations depending on them for almost a third of their imports, according to Geopolitik.
However, due to the escalation of tensions between the two countries, grain export through a safe corridor was talked about and Russia for its part is experiencing considerable difficulties exporting its record wheat harvest.
According to the Chief Economist for the United Nations Food and Agriculture Organization (FAO), Maximo Torero Cullen, the supply shortages in wheat and fertilizers have inflated prices putting approximately 1.7 billion people across 62 countries at risk of starvation.
In another statement, the general director of IKAR, Dmitry Rylko, a Moscow-based Agricultural Institute stated that sanctions have played a crucial part in obstructing trade, globally.
Russia is keenly aware of the challenges created by these unique market conditions and has been actively seeking to secure alternative markets for its exports to mitigate the geopolitical risk and threat of sanctions, Geopolitik reported.
Moreover, Russia's trade relations with India have grown extensively since sanctions began with Russian exports of oil and fertilizers all across the nation.
Major factors responsible for expanding the trading development are the emergence and ongoing expansion of the International North-South Transport Corridor (INSTC) which is a 7,200 km multi-modal trading route.
The INSTC reduces transit times between Russia and India by 40 per cent and cuts logistical costs by 30 per cent. The first pilot transit of goods from India to Russia along the INSTC took place in June 2022 but the route will further be expanded by 2030.
Tensions between Russia and the European Union have risen steadily over the past six months and it is now difficult to imagine the restoration of normal relations between the two organizations.
Despite of several shortcomings, INSTC was now being treated as a priority not only by India, Russia and Iran but also by other Central Asian Nations such as Georgia, Azerbaijan and Kazakhstan, according to the Geopolitik.
Russia is searching for more options to compensate for the sanctions slapped on the country by Western nations and the country is mooting a re-alignment of its trade relationships which is why Moscow aims to expand its trade in the Central Asian region through the North-South Corridor.
The INSTC corridor connects Asia with Europe and helps Asian nations by providing connectivity.
A series of heavy sanctions on Russia has not displaced the country of its stronghold position as an energy producer and now Russia's focus lies on the INSTC.
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