First-Ever: Russian Coal To Reach India In Train Via International North-South Transport Corridor

India-Russia trade received a significant boost with the first shipment of Kuzbass coal from Siberia. Two trains are currently en route to India via the International North-South Transport Corridor (INSTC).

The consignment is scheduled to arrive at Mumbai port via the Bandar Abbas port in Iran.

The INSTC is a 7,200 km-long multimodal transportation network that includes sea, road, and rail routes, providing the shortest connectivity path from St Petersburg to the port of Mumbai in India.

The corridor is part of Russia's initiative to discover new transport routes in response to Western sanctions, which have necessitated a shift in trade flows from Europe to Asia and the Middle East.

This corridor will not only provide access to Iran, Russia, Azerbaijan, and the Baltic and Nordic countries but also benefit the 11 Central Asian nations.

India has been increasing its purchases of coking and thermal coal from Russia, driven by the need to divert Russian coal supplies away from Europe due to the Ukraine conflict.

While India aims to boost its renewable energy capacity, its reliance on coal for power generation is expected to grow. Imports of metallurgical coal from Russia have surged three-fold to about 15.1 million tonnes in 2023-24 due to lower prices, while imports from Australia have declined.

Russia's share in India's metallurgical coal imports has risen from 8 per cent in 2021-22 to 21 per cent in 2023-24. This increase is attributed to cost benefits, though long-term imports from Russia may decrease due to expected export taxes and rising logistics costs.