Fact Sheet: Chennai-Vladivostok Sea Link

India is contemplating to unveil a direct shipping link between Chennai and Vladivostok. This key maritime route aims to connect India with Northeast Asia and Western Pacific region. This route will help India to expand its presence in Far East Russia and will also help in harnessing natural resources present in that region.

Significance

The new maritime route will help transfer of cargo between India and Far East Russia in just 24 days instead of 40 days. The existing shipping route from India currently passes through the Suez Canal and Rotterdam Port. The route connecting Mumbai with St Petersburg covers a distance of 8675 nautical miles, whereas the distance that needs to be covered in the proposed route connecting Chennai with Vladivostok is only 5647 nautical miles.

The proposed route could be transformed into a corridor which could juxtapose with Indo-Japan ‘Pacific Indian Ocean Corridor’ amid China’s ambitious Maritime Silk Route (MSR) which proposes to connect Asia with Africa.
India and Japan are planning to put into place a ‘Pacific-Indian Ocean’ corridor connecting the Pacific to the Indian Ocean. India and Japan proposes to embark upon joint development of infrastructure and capacity building projects across Africa, Iran, Sri Lanka and Southeast Asia, with a special focus on Africa in the backdrop of China’s One Belt One Road (OBOR) project connecting Europe and Africa. Because of strategic and security reasons, India has decided to stay away from China’s One Belt One Road (OBOR) project.

Background

India is showing keen interest in developing its economic ties with Russia’s Far East. India and Russia have identified trade and economic relations as a top priority in their overall partnership. India has invested nearly $5.5 billion in Russia’s oil sector. Recently, Russia had made an investment of $12.9 billion in India through the collaboration between Rosneft and Essar.

In the recently concluded India-Russia Business Dialogue at the Eastern Economic Forum held in Russia, External Affairs Minister Sushma Swaraj had pitched for greater trade, commerce and investment between India and Far East. The increased investment will help in achieving the target of USD 30 billion set for bilateral trade between both the countries by the year 2025. For the first time, the Far East Forum has witnessed senior level representation from India in the form of participation of Sushma Swaraj.

India had also recently unveiled Russia Desk for facilitating Russian investments into India as promised by Prime Minister Modi during the annual summit in St Petersburg held in June. This will be the third such desk in India after Japan and Korea.

China Factor and engagement with India

The Far Eastern Federal District is the largest of the eight federal districts of Russia. The district is twice the size of India. Though largest, the district is the least populated federal district of Russia with a population of only 6.3 million. The region is blessed with plenty of natural resources such as land, timber, mineral resources and other resources such as tin, gold, diamonds, oil and natural gas. To attract investments in this region, Russia has unveiled several initiatives like agricultural SEZ, the Vladivostok Free Port Project, mining of the huge mineral resources etc.

This is also the region which has witnessed growing Chinese presence particularly increase in Chinese population. Russia is concerned with the growing Chinese population in the region as it could change the demographics of the Far-east Russia. So, Russia feels that by increasing the presence of other countries like India, it could check Chinese influence in the region. In fact, India was the first country to open a resident Consulate in Vladivostok in 1992. However, as of now, the India’s present engagement in this region is limited to few pockets such as the Irkut Corporation in Irkutsk which is the building site for the Mig and Sukhoi aircraft, and the ONGC Videsh Limited has invested over USD 6 billion in the Sakhalin 1 project.

Indian companies have the opportunity to collaborate in sectors such as agriculture, mining, infrastructure and port development, diamond processing, agro-processing etc. in the region.

Conclusion

The proposal to open new maritime route makes economic and strategic sense. The proposal could help India and Russia to explore new trade opportunities. For India, it would also help in securing access to natural resources that is crucial for its economic growth. Strategically, it would also help in countering China’s ambitions of global dominance.

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