The International North–South Transport Corridor (INSTC) and the Chabahar Port in Iran have become the backbone of India’s effort to secure alternative connectivity into Eurasia
India’s interests in Eurasia are threefold – access, diversification, and agency. With no direct land border to Central Asia or Afghanistan, corridors like the INSTC provide gateways to regions long blocked by Pakistan’s denial of transit. While the maritime Vladivostok–Chennai route links India to the Russian Far East. These networks open markets for Indian chemicals and machinery and secure overland access to resource rich regions of Russia, Afghanistan, and Central Asia.
The second area of interest for India is diversification. As the global supply chains are increasingly getting fragmented, diversification of routes, currencies, and partnerships has become a new form of sovereignty. Further, agency forms the third important priority for India. New Delhi seeks a seat at the table where the rules of continental trade are written. Ongoing FTA negotiations with the Eurasian Economic Union, India’s role in the Ashgabat Agreement, and the long-term management of Chabahar all reflect a gradual move from corridor use to corridor governance.
Notwithstanding above developments, several challenges exist. The INSTC runs through Iran and Russia, zones shadowed by sanctions, thus creating challenges in completing the projects. Even as India secured a six-month US waiver for Chabahar access after the September 2025 snap-back of Iran sanctions, the underlying finance and insurance ecosystem remains fragile: banks hesitate, insurers demand steep premiums, and the private sector still views corridor trade as a state-driven venture rather than a commercial opportunity. On the ground, physical and regulatory mismatches persist – from rail-gauge incompatibility across the Caspian network to uneven customs harmonisation and the limited adoption of the digital eTIR (Transports Internationaux Routiers) system, which still excludes multimodal rail-sea links.
Caspian port capacity is improving, but the traffic remains modest compared to maritime routes. In effect, the legal and physical foundations for seamless transit exist, but the connective tissue – finance, insurance, and execution – remains to be streamlined.
To make trade flow smoothly along these corridors, logistical reforms need to supplemented with the financial reforms. India has already made notable progress by expanding the use of local currencies in cross-border trade. In August 2025, the Reserve Bank of India (RBI) simplified rupee–rouble trade settlements by allowing authorised banks to open Special Rupee Vostro Accounts (SRVAs) without prior approval and enabling surplus rupee balances to be invested in government securities and treasury bills. This reform has streamlined invoicing, payments, and settlements, cutting conversion costs and delays for Indian importers while offering Russian exporters a stable channel to hold and utilise rupee earnings. Complementing this, the Financial Benchmarks India Limited (FBIL) plans to expand rupee reference rates beyond the dollar and euro to include major partner currencies – enabling direct rupee pairs and reducing dependence on dollars.
Once dedicated credit, insurance, and investment mechanisms mature, perhaps through collaboration with the EXIM Bank of India, BRICS New Development Bank, and Eurasian Development Bank – India can translate these institutional reforms into commercial momentum, enabling the private sector to find the corridor truly viable. For India it is really important that the private sector, particularly firms in logistics, energy, and manufacturing, also views Eurasia not as a risk zone but as a frontier of growth.
The geopolitical shifts around Eurasia are opening a narrow but valuable window for India. Russia’s pivot towards Asia, Iran’s drive to become a regional transit hub, and India’s logistical and financial reforms together give the INSTC its strongest momentum since its inception in 2000. For New Delhi the Eurasian corridor are a tool to diversify risks, not to project power. It is an extension of strategic autonomy into logistics and finance. The coming years will test whether the INSTC can move beyond state-led diplomacy to genuine commercial traction. Success will depend on the speed of coordination among the nations, the confidence of private investors, and the predictability of regional politics. For Delhi, the objective is clear, to secure access and agency in continental Eurasia without being drawn into its rivalries.
Rupal Mishra – Senior Research Fellow, Centre for Russian and Central Asian Studies, Jawaharlal Nehru University.
Valdai Discussion Club
