What would we do with a naval base in India? We do not want to stick our hands in Indian pot.
This report is little old ,dated back to 2002....
India, Iran, Russia map out trade route
By Sudha Ramachandran
BANGALORE - The recent North-South Corridor Agreement that provides for a new India-Iran-Russia transport link could transform the face of trade in the region. However, several hurdles stand in the way of this sea and land corridor evolving into a bustling "southern Silk Route".
The corridor connects Mumbai with St Petersburg via Tehran and Moscow. In effect, it links the Indian Ocean with the Baltic Sea. Linking the Indian commercial capital of Mumbai with the Iranian port city of Bandar Abbas by maritime transport, the North-South corridor will then rely on road and rail networks to connect Bandar Abbas with the Caspian Sea ports of Bandar Anzali and Bandar Amirabad, via Tehran. From here, cargo will be carried across the Caspian Sea to the Russian port of Astrakhan. Then a long stretch of road and rail will run up to St Petersburg, the Russian port on the Baltic Sea, through Volvograd and Moscow.
The corridor is much more than a link connecting just Mumbai, Tehran and Moscow. It provides Europe access to Asia and vice versa. The Russian network of roads and railroads are connected to Central and Western Europe via Eastern Europe. Iran has land links to Central Asia and its ports offer warm-water sea routes to India. "With India, Myanmar and Thailand getting linked by road, the potential of the North-South corridor is endless. The corridor could evolve towards boosting trade between Europe and Southeast Asia," says an official in the Confederation of Indian Industry (CII).
This new initiative is expected to reduce transit time and the cost of transportation of goods. Compared with the 16,129-kilometer route through the Suez Canal and the Mediterranean Sea that is currently used, the North-South Corridor is just 6,245km long. It will cut transport time by at least 10-12 days and transport costs by about 15-20 percent.
"During trial operations that have been on for a year now, the route has already logged shipment of some 1,800 containers and the figure is expected to touch the 8,000 mark later this year. The corridor is expected to handle 15 million to 20 million tons of freight annually, with the trade turnover pegged at US$10 billion," writes Shishir Gupta in the weekly news magazine India Today.
"A cut in transport costs will make Indian goods cheaper and therefore more competitive in European markets," says the CII official. "The corridor will not only boost India's trade with Russia and Iran but also that with the Baltic states and the Central Asian countries," he adds.
Indian officials and entrepreneurs have been looking to explore the immense possibilities that lie with increased interaction with the Central Asian republics of Turkmenistan, Uzbekistan, Kazakhstan, Kyrgystan and Tajikistan. Most of these countries have enormous oil and natural-gas deposits. India, which has so far been over-dependent on oil from the Persian Gulf states, is keen to tap into the Central Asian energy reserves. There is a market, too, in this region for Indian heavy machinery, pharmaceuticals and tea, to name just a few.
However, the potential for Indian-Central Asian trade has been hamstrung by the India-Pakistan rivalry. The shortest route from India to the Central Asian republics is through Pakistan and Afghanistan, but New Delhi cannot use this route given its troubled relations with Islamabad. The North-South Corridor holds out new hope for India for it "will enable India to bypass Pakistan and yet reach out to Central Asia", says an official in the Indian Ministry of External Affairs. "We do not have to wait for India-Pakistan relations to normalize to tap into Central Asia," he points out.
However, the route to booming trade and economic development is not without obstacles. Analysts are drawing attention to the fact that the potential of the transport corridor will be determined by the funds available to upgrade their rail and road networks and other related infrastructure. "None of the signatories to the North-South Corridor Agreement - Russia, Iran and India - have that kind of money," warns the CII official.
There is also the security issue. The North-South corridor runs through the politically unstable Caucasus region. Few will be willing to send cargo through conflict-ridden Chechnya or Daghestan. Besides, many Western countries, given their hatred for Tehran, will be reluctant to opt for a route that runs through Iran. However, neither is the political situation in the Middle East stable, yet shipping companies go for the Suez route because it makes economic sense.
It will take some years for shipping companies to take the risk of putting their cargo through an unexplored passage. The lure of Central Asia, to which the Suez route does not provide access, just might tilt the transport route game some day in the North-South Corridor's favor.
Sir, oweing to the hostality between India and Pakistan, Presence of China in Gwadar (very near to the Iranian Port), hostality of West to Iran- these three factors necessiate Russian presence in Indian Ocean, atleast in Arabian sea.