Northern Sea Route as an Essential Element to Harness India’s Interests in the Arctic (GS Paper 3, Economy)
Context:
- A recent meeting about the development of the Northern Sea Route (NSR) environmental monitoring project brought together experts from around the world. The experts from India, Turkey, Egypt, Russia, and other countries took part in the meeting about the third stage of the NSR environmental monitoring project.
- An integrated transport system based on green shipping principles will connect the Northern Sea Route, the Indian Ocean, and the North-South international transport corridor. The operation of such a system will be beneficial for all parties involved, and, in particular, for the countries of Central Asia, Russia and India.
India’s interest in the opportunities of the NSR:
- The NSR has an additional sustainable route for international cargo shipping, and it is a route of crucial importance for India. The Arctic energy reserves have the potential for a substantial impact on India’s energy dynamics to sustain India’s economic growth rate.
- In addition, the Arctic offers opportunities in various sectors in which Indian enterprises can be involved, such as shipbuilding, construction, modernization and operation of commercial port infrastructure, creation of digital and service infrastructure, scientific cooperation in the field of ecology, and sustainable Arctic shipping.
- Given the country’s unique maritime position, the latter plays an important role in the economic development of India, especially in the country’s international trade.
- India has 12 major ports and 187 non-major ports, handling about 1400 million tons of cargo every year, as 95% of India’s trade by volume and 68% by value transits by sea. India’s Exclusive Economic Zone holds significant recoverable resources of crude oil and of recoverable natural gas.
- It can potentially enhance value addition in coastal manufacturing and services, trade, shipping, deep-sea minerals, aquaculture and fisheries, and marine-related technologies.
- The coastal economy also sustains over 4 million fishermen and other coastal communities.
Transit freight traffic:
- The NSR supplements the existing transportation routes while also helping to sustain global supply chains, being the shortest way between Northern Europe and the countries of the Asia-Pacific region.
- In light of the annual growth of world cargo traffic, an NSR will strengthen the global logistics network, offer the global trade community the opportunity for greater variety and safety of cargo shipping routes, and make it more adaptive and resistant to unforeseen disruptions.
- In addition, global logistics always strives to balance safety, sustainability, and efficiency, but over the past few years, events have occurred and are occurring that are changing both the world orders and global logistic chains. In such conditions, safety and sustainability become clear priorities.
- The NSR is becoming a unique new route with very great potential for cooperation in the development of transit freight traffic.
Environment sustainability:
- It is imperative that the active development of NSR should be complemented with appropriate efforts regarding environmental care and protection of the biological diversity of the Arctic region.
- India has substantial experience in research in Antarctica, however, in the Arctic its research efforts began only in 2007.
- Recognizing the significance of the Arctic, India established its Arctic research station in 2008, and the Arctic program aims to contribute to the development, consolidation, and dissemination of the current understanding of climate change, its impacts, and adaptations in the Norwegian Arctic, Svalbard.
Marine Research Center:
- To ensure sustainable and environmentally responsible shipping along the NSR, starting from 2021, on the initiative of Rosatom, the Marine Research Center of M.V. Lomonosov Moscow State University has been implementing a program of the NSR environmental monitoring taking into account best Russian and international practices and with an international group of experts (IGE) on marine ecology and biological diversity conservation involved in the activities.
- In three years, representatives of leading scientific institutions of India, Norway, Finland, France, Iceland, Great Britain, China, Egypt, Malaysia, and Turkey took part in the project.
- The work resulted in a comprehensive program for monitoring the NSR environment and biodiversity, and it will be continued in 2024, with the Indian academic community playing an important role in this work.
Nuclear icebreakers:
- The NSR has several additional important advantages, such as lower emissions bills across the taxable territory due to shorter distances compared to other routes. Given that the maritime industry joined the EU’s Emissions Trading System (ETS) as of 2024 with major freight firms seeing hefty bills for their carbon emissions, savings on EU ETS by reducing emissions across the taxable territory could be an addition to economic benefits for shippers due to NSR shorter length.
- So far, all these advantages of NSR remained unutilized since most of the NSR passes through the seas of the Arctic Ocean, which, for a significant part of the year, are bound by thick ice, making it challenging for merchant ships to navigate.
- But this problem could be solved by using icebreakers, particularly nuclear-powered ones. Powerful and autonomous, advanced nuclear icebreakers have environmental benefits with no hydrocarbon fuel usage, no fuel spill accidents, and negligible carbon footprint.
- In 2018, Rosatom, which operates the world’s only nuclear-powered icebreaker fleet, became the infrastructure operator of the NSR.
- For years, it has been responsible for the organization of the NSR navigation, construction of infrastructure facilities, navigation and hydrographic support, and a navigation safety system in harsh Arctic conditions. As a result, the volume of cargo transportation has been growing every year.
Blue Economy:
- The Ocean resources contribute to social and economic growth and welfare in many countries around the world through the industries associated with marine and coastal resources. They provide the livelihood of more than 3 billion people, produce 50% of oxygen, and absorb 30% of carbon dioxide.
- Since the oceans play such a significant role in providing social and economic well-being to future generations, the “Blue Economy” concept is intrinsically vital.
- The Blue Economy aids in achieving the UN Sustainable Development Goals and promotes global economic growth. According to OECD estimates, the global ocean economy generates USD 1.5 trillion in global value-added annually, and this figure is expected to double in size to USD 3 trillion by 2030.
- The World Ocean carries 90% of global trade, the ocean economy creates jobs for millions of people worldwide. As such, it’s safe to say that the Blue Economy is the economy of the future, with tremendous development potential, and governments and businesses across the globe are actively developing it.
Vision of New India by 2030:
- The Government of India’s Vision of New India by 2030 highlighted the Blue Economy as one of the ten core dimensions of economic growth. Moreover, India was among the first in the world to create a Department of Ocean Development in 1981, now the Ministry of Earth Sciences (MoES).
- The country also launched new programs such as “Deep Ocean Mission,” “Oceanography from Space” and “Launching of the data buoys” along the Indian coastline.
- The policy aims to increase the contribution of the “blue economy” to India’s GDP in the next five years, improving the lives of coastal communities, preserving marine biodiversity, and ensuring the safety of marine areas and resources.
Way Forward:
- For India to be able to benefit from these Arctic resources, they would need partners. With this regard, the Indian Minister of Commerce and Industry expressed the hope that Russia and India could jointly develop the NSR.
- The use of the NSR will make it possible to create a viable additional sea transport route — to the existing land corridor “North-South” between India and Russia.
- Russia-India cooperation in the Arctic is mutually advantageous; it is a strategic necessity for both countries given the challenging state of the global economy and the need to revive both economies for the socioeconomic development of the people of both countries.
