Pakistan has great chances to reinterpret itself in the changing regional geoeconomic realm by joining the International North-South Transport Corridor (INSTC). The decision-makers must give geoeconomic issues top priority in policy formulation since this is the most practical way to maximize the nation’s economy and steer it toward long-term, sustainable development.

As Pakistan’s National Security Policy (NSP) properly notes, attaining national security depends on first addressing economic security. Former National Security Adviser of Pakistan Moeed Yusuf underlined that it is imperative to favor economic security while using the benefits of a strong economy carefully if one is to increase human security, defense, and diplomacy.

In this sense, Pakistan’s choice to join the corridor is both strategic and vital. Following the acceptance of Russian President Vladimir Putin’s offer made during the State of the Union address in 2023, Pakistan’s Ambassador to Russia, Khalid Jamali lately said that Pakistan is in line to start the admission procedures to join INSTC. Integrating sea, rail, and road lines, the INSTC is a transforming geopolitical project that helps products from South Asia to Europe pass via Central Asia, the Caucasus, and Russia.

Pakistan has to take advantage of this chance to increase trade possibilities, accelerate economic development, and improve ties to cooperating countries.

The path mostly consists in sending goods from India to Iran. Traveling over the Caspian Sea by ship, Iranian goods arrive in Southern Russia by truck or train. From there, trains or trucks carry the goods to Northern Europe, passing Moscow. Pakistan must be included in this ambitious corridor if it is to maximize its strategic position and a major player in projects on regional connectivity. Pakistan has to take advantage of this chance to increase trade possibilities, accelerate economic development, and improve ties to cooperating countries.

With a quicker and time-saving commercial route with Russia and Europe, the INSTC offers Pakistan a rich substitute that helps to lower reliance on the conventional Suez Canal transit. This path will also provide Pakistan access to other markets and create fresh investment opportunities. If carefully seized, it will bring Pakistan’s economy under stability. Being an energy-deficient state, Pakistan’s strategic joining into the INSTC will also be important in relation to resource-rich Central Asia.

Once included into the corridor, Pakistan’s connection with Russia might get much stronger. Pakistan is aggressively pursuing Russian help and has asked to be members of BRICS+. In the middle of an economic crisis and continuous energy shortage, a strong cooperation with Russia would be rather helpful. Russia is keen to find new markets since the invasion of Ukraine results in a European ban on its oil and gas. Notwithstanding the expected prospects, Pakistan cannot benefit much from the inclusion in this corridor until it successfully overcomes the possible obstacles in the way to the real materialization of the project.

One of the main players in INSTC, meant to increase its diplomatic and economic influence in the area, is India. One important factor is how the continuous hostile relationship between India and Pakistan can affect Pakistan’s capacity to fully use the financial advantages of this important corridor. India’s formal reply is yet unknown; however, it may have misgiven about Pakistan’s involvement in this initiative.

One of the main players in INSTC, meant to increase its diplomatic and economic influence in the area, is India.

Strategically positioned to offer connection with Central Asia and Afghanistan, India has spent lavishly in building Chabahar port in Iran, viewed as a likely substitute for Gwadar port. This could change trade routes and economic possibilities away from Pakistan, therefore hindering the nation’s economic development.  Once Pakistan joins the corridor, it will be able to neutralize this threat and challenge India from a better posture. China Pakistan Economic Corridor (CPEC) and the INSTC follow complimentary paths. Acting as a trade center connecting the Middle East, Central Asia, and South Asia, the Gwadar Port can significantly help the North-South Corridor.

Moreover, by connecting Gwadar to Chabahar port and the INSTC system, Pakistan might become known as a major transit hub and make money from other trade-related activities including transportation fees. With the present commercial disturbance in the Red Sea following the Israeli conflict in Gaza, Russia and China both want to increase their export reach and the INSTC path can be the desired substitute. Regarding regional integration, Pakistan and Iran are strategically important hubs for this aim. Still, the part India plays in this regard will be crucial.

India also worries that Pakistan, once included into this corridor, would impede goods flow from India, considering the lengthy history of failed execution of any kind of transportation project between both. Though the precise path connecting Pakistan to the INSTC system is yet unknown, it is too early to predict how it will effect India’s regional influence overall.  Apart from the sanctions imposed on Russia by the US and like-minded European governments, another risk hovering is the US imposing limits on activities with Iran.

An important geopolitical obstacle to the North-South Corridor is the growing security danger in the area. The planned commerce route of INSTC may be disrupted by the regional conflicts, political unrest, and initiatives by several terrorist groups in regions especially Iran, Afghanistan, and Pakistan. Earlier, a notable example is the horrific acts carried out by militant groups like TTP and BLA inside Pakistan on several times in an attempt to compromise CPEC.

An important geopolitical obstacle to the North-South Corridor is the growing security danger in the area.

To modernize highways, rail lines, and ports, Pakistan requires large investment in building the necessary infrastructure and amenities. The continuous flow of goods depends also on harmonization of border crossing policies, tariff policy regulation, payment methods enhancement, and coordinated management with counterparts in the INSTC. The inefficiencies and congestion might impede the development of this important Eurasian transportation system.

Interestingly, financing has presented a major obstacle for INSTC, which helps to explain delays in its growth. The absence of support from outside organizations has meant that local governments and regional development projects have mostly been funding source. This scattered financial support has hampered the quick development of the projects along the corridor.