Joint Iran-Russia insurance marking watershed in INSTC transit, logistics
Joint Iran-Russia insurance, as a significant step in developing the International North-South Transport Corridor (INSTC)’s transit and logistics, increases cargo transport security while reducing sanctions-related risks.
Amidst recent geopolitical shifts and the formation of new economic alliances, cooperation between Iran and Russia in the transport and transit sector has entered a new phase, Tasnim wrote.
One of the most significant challenges facing the cooperation has been the lack of reliable insurance coverage for goods transiting the strategic North-South corridor. Due to Western sanctions, international companies had refrained from providing such coverage. Now, with the signing of a joint insurance policy between Tehran and Moscow, a major step has been taken towards securing the key route and mitigating sanctions-related risks; an action that is not only a logistical tool but also indicative of the formation of independent economic infrastructures within the new world order.
The 7,200-kilometer INSTC, as one of the strategic global trade routes, connects the countries of the Persian Gulf, Central Asia, Iran, the Caucasus, Russia, and India. This corridor, comprising rail, road, and sea routes, can, according to expert estimates, reduce cargo transit time between India and Russia from 45 days to approximately 20 days.
Given geopolitical developments, including the Russia-Ukraine war, the blockage of traditional routes like the Suez Canal, the Red Sea crisis, and US interventions in trade routes, the importance of the North-South corridor has become more prominent than ever. Consequently, the issue of insuring transit cargo on the strategic route has become a primary concern for merchants and governments.
Insurance, as one of the pillars of the international supply chain, plays a vital role in mitigating risks such as theft, accidents, cargo damage, delivery delays, and even political risks and sanctions. Given the refusal of many international insurance companies to provide services to Iran and Russia under sanctions pressure, establishing a joint domestic insurance framework can fill the gap and provide a model for other independent countries.
According to published information, the joint Iran-Russia insurance policy was designed and signed in a consortium format among domestic insurance companies of the two countries, with the support of the Iranian Embassy in Russia.
The main objectives of the insurance document include comprehensive coverage of all transit goods from origin to destination (land, rail, and sea); compensation for potential losses arising from natural disasters, theft, accidents, and route stoppages; coverage for political and sanctions risks, including cargo seizure or obstacles in third-country ports; guaranteed compensation payments to Iranian and Russian transport companies; and expediting the compensation process through a joint arbitration mechanism.
One significant outcome of this insurance policy is increased confidence among exporters and foreign investors in the North-South transit route. In recent years, the lack of transparent and stable insurance has been one of the main obstacles to developing investment along this route.
According to experts, establishing an independent insurance mechanism between Iran and Russia is a milestone in the independence of Eastern countries' supply chains from the dominance of the Western financial and insurance system. The action is not merely a logistical tool, but a powerful political and economic message to the world.
Some experts also believe the insurance policy could pave the way for forming a regional insurance alliance within the framework of economic blocs like BRICS or the Shanghai Cooperation Organization. As other countries join the structure, the North-South Corridor could transform from a purely logistical route into a complementary economic system.