It's time for India to invest in maritime corridor through North Sea Route

The country must adopt strategies for various transport corridors to ensure a resilient and adaptable trade supply chain

Ram Singh

Ram Singh, a professor at IIFT New Delhi

Ram Singh
At the eighth Eastern Economic Forum (EEF) summit in Vladivostok on September 11th, 2023, India and Russia agreed to scale up their engagements for operationalisation of the Eastern Maritime Corridor (EMC) by connecting the strategic ports of Vladivostok and Chennai. The discussions held between Sarbananda Sonowal, India’s Minister of Ports, Shipping and Waterways, and A O Chekunkov, Minister of the Russian Federation for the Development of the Far East and the Arctic, covered a wide spectrum of maritime connectivity issues, underlining the growing importance of maritime cooperation between the two nations.

Of particular significance was the exploration of innovative transportation routes, notably the Northern Sea Route (NSR), also known as the Arctic Route, which holds immense potential for facilitating trade as an alternative, cost effective and unconventional trade route for trade with Europe and Far East. Sonowal and Chekunkov’s meeting was significant in the context of the India’s burgeoning economic engagement with countries in the Far East, Russia and those beyond in Europe.

India intends to de-risk its supply chain and is accordingly diversifying them through different maritime and transport corridors in the context of its growing economic engagements with countries of the West, i.e. India-EU and India-UK FTA, along with deepening economic engagement with Russia. The synergy between India's trade aspirations and the emerging maritime routes underscores the potential for robust economic growth and cooperation in the region.

Moreover, in a significant development, India and Russia formalized an agreement to provide training for Indian seafarers in the challenging Polar and Arctic waters. This educational endeavour will be hosted at the prestigious Russian Maritime Training Institute, the GI Admiral Nevelsky Institute, situated in Vladivostok. Equipped with state-of-the-art simulator training facilities, this initiative will enhance the competency of Indian seafarers, aligning them with the demands of navigating these demanding Arctic conditions. In this context, let us delve in key areas of consideration for India to operationalise the North-Eastern Routes for enhanced economic engagements.

Route significance: India should expand its focus beyond the Chennai-Vladivostok Eastern Maritime Corridor (EMC) and explore the Northern Sea Route (NSR) for trade between Asia and Europe. The NSR offers a significantly shorter route than the Suez Canal, potentially reducing the distance from Chennai to Rotterdam by 10 per cent to 20 per cent, saving around 8 to 12 days or more. This is especially relevant for bulk cargo like coal, fertilisers, and energy products, as the proposed India-Middle East-Europe Corridor (IMEC) might not be optimal for them due to intermodal transhipment.

Considering the high charges of the Suez Canal, piracy concerns, and navigational fees, the NSR presents a compelling alternative. However, it's crucial to recognize that the NSR has seasonal limitations, primarily operating during the summer with reduced ice levels. The actual savings in time and distance depend on factors like ice and vessel speed, varying based on departure and arrival ports and voyage conditions.

Moreover, the feasibility of the NSR hinges on ice navigation capabilities, infrastructure development, environmental considerations, and geopolitical factors. India must carefully evaluate these aspects to harness the full potential of this shorter trade route, which can have a significant impact on the efficiency and cost-effectiveness of its maritime trade with Europe. Considering the developments so far, it essentially offers the benefits in the long run.

Way forward

For NSR to be operational, first and foremost, we must start investing in maritime infrastructure i.e. develop and upgrade terminal facilities in the eastern and northern regions of India to handle increased shipping traffic and simultaneously acquiring terminal facilities at strategic nodes of this route in Russia. These potentially can be Murmansk Port, Arkhangelsk, Norilsk, Severodvinsk, Tiksi, Sabetta, Dikson, Pevek, Naryan-Mar and Yakutsk. Furthermore, we can acquire a few icebreakers and ice-class vessels to navigate Arctic waters effectively or alternatively we can partner with shipbuilding companies of Russia to tap their expertise, technical know-how and knowledge to build such vessels domestically.

Looking at our ever-growing needs of energy resources, we can explore opportunities for oil and natural gas exploration in the Arctic region, in addition to our existing efforts in Sakhalin. Looking at the enhanced cooperation of Russia and China in operationalisation of this route and silent and tacit enthusiasm of ASEAN, Japan and South Korea, the NSR is a real time economic opportunity. India’s initiative to train its seafarers for NSR is timely, given the policy of de-risking in our logistics strategy and supply-chain optimization.

In the bargain, we shall not only form strategic alliances with countries like Russia, Canada, the United States and Nordic countries, which have significant interests in the Arctic, but we must engage in multilateral forums like the Arctic Council to participate in governance and policy discussions on associated challenges like climate change mitigation, human resource development, energy exploration, and security and defence including improving our surveillance capabilities.

Accordingly, it is pertinent not only to improve the logistics and supply chain management for efficient movement of goods through NSR routes but also to develop digital solutions and technology platforms for real-time tracking and management of shipments. The Eastern Economic Summit was indeed an opportunity and we should explore beyond to invest in research to understand the changing Arctic climate, navigation conditions, and accordingly develop technologies for safe navigation and resource exploration in Arctic waters. Given the high stakes involved, all our actions should be under evolving geostrategic landscape and our diplomatic outreach to strengthen relations with Arctic nations to facilitate access to these routes.

By adopting a multifaceted approach that balances strategies across various transport corridors, India can ensure a resilient and adaptable trade supply chain that effectively navigates global challenges and exploits emerging opportunities in diverse routes, ultimately enhancing resilient and inclusive economic growth and stability.

The writer is a professor at IIFT New Delhi.
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

First Published: Sep 25 2023 | 1:33 PM IST

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