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HomeEconomyUzbekistan keen to join INSTC for full implementation of BIT with India

Uzbekistan keen to join INSTC for full implementation of BIT with India

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Central Asian states – Uzbekistan & Turkmenistan express interest to join International North South Transport Corridor (INSTC) to trade with India as the viable route to the Indian Ocean Region ahead of the BRICS Summit in Kazan that would among other matters lay emphasis on inclusive connectivity corridors.

Uzbekistan in particular is keen to harness the full potential of INSTC as well as the Chabahar Port in the backdrop of the Bilateral Investment Treaty (BIT) signed in Tashkent on Friday during the visit of Finance Minister Nirmala Sitharaman. Uzbekistan has sent its first cargo to India via INSTC recently.

“The BIT between India and Uzbekistan assures appropriate protection to Uzbekistan investors in India and Indian investors in Uzbekistan, in light of relevant international precedents and practices. It will increase the comfort level and boost the confidence of investors by assuring a minimum standard of treatment and non-discrimination, while providing for an independent forum for dispute settlement through arbitration,” according to a statement issued by the Indian government.

“The BIT also provides for protection to investments from expropriation, provides for transparency, transfers and compensation for losses. However, while providing such investor and investment protection, balance has been maintained with regard to State’s right to regulate and thereby provides adequate policy space,” the statement emphasised.

Over the last two years the volume of trade between India and Russia has increased using INSTC. Azerbaijan is working on operationalising the route via its territory which takes the shortest possible time between Mumbai and St Petersburg. During the recent visit of the Russian PM to Tashkent, he impressed upon Uzbekistan to join INSTC for trade with India.


Earlier, Uzbekistan had expressed interest to form a trilateral of sorts with India and Iran as the other partners for using Chabahar Port. Both Uzbekistan and Kazakhstan have been enthused on Chabahar Port after India in May signed a 10 year deal with Iran to operate the Chabahar Port. Russia and Azerbaijan have agreed to boost the Azerbaijan route of INSTC, a decision taken during Russian President Vladimir Putin’s two-day visit to Baku in August.The Azerbaijan route is the original route of the three INSTC routes for Indo-Russian trade via Iran, but Azerbaijan has been slow in boosting infrastructure. Since the Ukraine war, the INSTC emerged as a key route for Indo-Russian trade and has contributed to the increase in bilateral trade. Armenia wants to join the INSTC, making it the fourth route for trade between India, Russia, Eurasia and Europe.

The INSTC contains three main routes relative to the Caspian Sea, including the Trans-Caspian Route through the ports of Astrakhan, Olya and Makhachkala in Russia, and the ports of Bandar Anzali, Amirabad and Nowshahr in Iran. India-Russia trade has been primarily taking this route.

The second is the Eastern Route along the existing railway line through Kazakhstan, Turkmenistan and Iran. Some consignments to India came via this route from Eastern Russia.

The Western Route extends from Astrakhan through Samur across Azerbaijan to the Astara station, and through Iran via the under-construction Astara-Rasht-Qazvin line.

In May 2023, Russia and Iran signed an intergovernmental agreement to team up for the construction of the 162-km Rasht-Astara railway line. The project provides for €1.3 billion Russian allotment to Iran. The project, estimated at €1.6 billion, is scheduled to be completed in 2027-28.

INSTC and Chabahar Port provides a second option to the Eurasian states to access the ocean apart from China’s Belt and Road Initiative which violates India’s sovereignty passing through PoK.



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