Trade Policy Current Affairs
The International North-South Transport Corridor (INSTC) is considered as gateway for India to expand trade and investment links with Central Asia and Eurasia.
Its importance was highlighted in India’s Foreign Trade Policy of India 2015-20.
However, recently it gained importance in light of the evolving geopolitical developments of India after Prime Minister Narendra Modi’s visit to 5 Central Asian Countries viz Uzbekistan, Kazakhstan, Turkmenistan, Kyrgyzstan and Tajikistan.
International North-South Transport Corridor (INSTC)
- It is a multi-modal trade transport network that includes strategic rail, road, and water transport connecting India with Central Asian and Eurasia Countries.
- Route: It will connect Mumbai (India) via Chabahar and Bandar Abbas ports of Iran with Baku (Azerbaijan) to Moscow (Russia) and other countries in Central and Eastern Europe via the Caspian Sea.
- Economic Integration: It will help in facilitating India’s economic integration with Eurasian economies and other countries in surrounding regions.
- If India partners with Eurasian Economic Union (EEU), it will further boost and expand its economic, trade and investment opportunities in more countries in this region.
- Shorter transport route: It will be a shorter route to transport goods to Eurasian and Central Asian regions compared to present route via Suez Canal and western European countries. Thus, reduce the cost of transporting goods from India to Eurasia.
- Natural resources access: It will help India to tap the abundant natural resources potential of Central Asian countries for its energy security. These countries are having rich deposits of petroleum, natural gas and uranium along with deposits of fertilizer inputs such as potash.
- Exports: Many sectors in this region are becoming increasingly service-oriented which can benefit India to export expertise in information technology and IT-enabled services.
For India, the INSTC will be strategically important trade corridor of tremendous promise that could help to develop its economic and strategic importance in Eurasia and Central Asia. It could also give India economic and strategic relevance to tackle regional ambitions of China through its One Belt, One Road Initiative.
Map Source: CIA
African countries have signed a historic The Tripartite Free Trade Area (TFTA) that facilitates creation of Africa’s largest free-trade zone.
This free-trade zone will cover 26 countries in an area from southernmost tip of African continent i.e. Cape Town (South Africa) to Cairo (Egypt) in the north.
The pact was signed in Egypt will intent to ease the movement of goods across 26 member countries which represent more than half the continent’s GDP.
TFTA pact combines existing three trade blocs among the African nations viz
- Southern African Development Community (SADC).
- East African Community (EAC).
- Common Market for Eastern and Southern Africa (COMESA).
It will remove trade barriers on most goods, making them cheaper and stimulating $ 1 trillion worth of economic activity across the region of more than 600 million people. Thus bolster intra-regional trade by creating a wider market that will increase investment flow and enhance regional infrastructure development.
The pact will then be officially unveiled at the upcoming 25th summit of the African Union in South Africa. After adopting it will need parliamentary ratification from all member-nations.
Map Source: Agence France-Presse (AFP)