India’s multi-modal logistics corridor will tap trade opportunities in Latvia, turning the tiny nations off the Baltic Sea into a gateway for Indian goods entering Northern Europe. The Mumbai-Tehran-Moscow pathway is said to rival the Suez Canal route as it facilitates faster, cheaper and safer cargo movement between Asia and Europe.
Latvia’s largest seaport, Riga, remains ice-free and workable throughout the year. 98% of goods or 36 million tonnes of cargo processed at the port are transitory, only 2% are re-directed for internal consumption.
A pilot container to be launched this month will travel from JNPT to Latvia. The route is expected to cut transit time by 40% and carriage cost by 30%. The container will use a combination of road, rail and ocean routes to travel between JNPT and Bandar Abbas in Iran. It will then use road and rail routes to arrive in Riga.
According to a state-owned Latvian logistics firm, this route is best suited to ship high-value cargo such as pharmaceutical items and car parts. Cargo sent along the new corridor will arrive in 15 days as opposed to the 45 days it took to arrive by sea.
The shorter transit times and reduced pricing are likely to make Indian exports more competitive in the region, boosting profits for Indian exporters and vamping up production at Indian manufacturing units.