New eastern route cuts down shipping time, costs; promises to boost India-Russia trade routes

Context: India has surpassed China to become the largest buyer of Russian oil in
2024, and with this significant move the Eastern Maritime Corridor has also become
the new route which will play an increasingly significant role in boosting
commodity trade between India & Russia, especially crude oil shipments. The
new route from Chennai to Vladivostok will help in saving shipment times
between the two countries and thereby transportation costs. Trading of
commodities such as crude, coal and LNG have already commenced via the route
since early this year, while other products including fertilizers and
containerised cargo that warrant longer-term commitment from both parties are
also now being shipped.

Key points

·       Overview: The
Chennai-Vladivostok eastern maritime corridor has become operational and is
carrying oil, food, and machines, Minister for Ports, Shipping, and Waterways
recently.

·       Eastern
Maritime Corridor (EMC): Envisioned during the Eastern Economic Forum (2019)
in Vladivostok, Russia. It seeks to develop a sea route between the Indian port
of Chennai and Vladivostok through Northeast Asia. Covers around 10, 300 km. Passes
through the Sea of Japan, the South China Sea, Malacca Strait, etc.

·       Significance
of the Corridor: Reduced Logistics cost - Due to reduction in
transportation time (by around 16 days) and distance (by around 40%). Present
trade route between Mumbai and St. Petersburg (Russia) via Suez Canal takes
around 40 days and covers around 16, 066 Km.

Boost India’s
maritime sector - The sector handles around 95% (by volume) and 70%
(by value) of country’s trade. Complement India’s Maritime Vision, 2030 that
encompasses more than 150 initiatives from all areas of Maritime Sector.

Address China’s
Dominance - Passes through the South-China Sea. Vladivostok is located at a short
distance from Russia-China border.

Boost India’s
Act Far East Policy - Offer enhanced access to Russian resources and
provide stronger foothold to India in the Pacific trade network.

·       Northern
Sea Route (NSR): The Northern Sea Route (NSR), the shortest shipping
route for freight transportation between Europe and countries of the
Asia-Pacific region, straddles four seas of the Arctic Ocean. Running to 5,600
km, the Route begins at the boundary between the Barents and the Kara seas
(Kara Strait) and ends in the Bering Strait (Provideniya Bay).

·       India-Russia
Cooperation on the Northern Sea Route (NSR): Cargo Transit -
Identifying targets for Indian Russian cargo movement along the NSR.

Training of
Indian Sailors - The potential for training Indian sailors in polar navigation
techniques.

Arctic
Shipbuilding - Collaborative development of projects focused on Arctic shipbuilding
technology.

Memorandum of
Understanding (MoU) - A draft MoU between India and Russia was proposed
to enhance cooperation in cargo shipping along the NSR.