FESCO Plans To Set Up Transport and Logistics Hubs in China and India For SCO Trade Development

Russia’s FESCO Transport Group intends to set up transport and logistics hubs in China and India, according to FESCO’s Vice President for Finance, Leonid Zvyagintsev. The hubs will be used to transport goods both within the Shanghai Cooperation Organization (SCO) countries and to Africa. Zvyagintsev said that FESCO has initiated the transition to digital veterinary certificates to simplify the transportation of food products within the SCO.

The SCO includes full members Belarus, China, India, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Russia, Tajikistan and Uzbekistan. Dialogue partners include Afghanistan and Mongolia, while Armenia, Azerbaijan, Bahrain, Cambodia, Egypt, Kuwait, Maldives, Myanmar, Nepal, Qatar, Saudi Arabia, Sri Lanka, Turkiye, and the United Arab Emirates are Observers. Guest attendees include ASEAN, the CIS, Turkmenistan, and the United Nations. Like BRICS though, it is not a trade entity with specific trade regulations amongst its members.

Annual trade growth among SCO countries is expected to be a consistent 10% per annum, both through trade between member countries and with external partners. By 2030, the total trade volume of the SCO is estimated at US$11.1 trillion.

However, Zvyagintsev pointed out that there are certain barriers to the development of trade in the SCO. Among them, he highlighted uneven development; low throughput capacity at border crossings; differences in railway gauge width between Russia, India, and China; insufficient development of intermodal hubs; cumbersome customs procedures; and the need to harmonize the regulatory framework. In addition, the SCO currently lacks a common mechanism for financing infrastructure projects, a system of mutual cargo insurance, and the payment system is imperfect. We have previously discussed these issues here. Digitalization is also underdeveloped.

For its part, FESCO will develop multimodal container transportation in the SCO using various routes: the group currently has representative offices in five SCO countries, and in May 2025, it headed the association’s working group on transport and logistics.

In 2024, FESCO transported more than 322,000 TEU between Russia and China by both land and sea routes. Also, since 2023, FESCO has launched services connecting St. Petersburg and the Port of Novorossiysk with India. The volume of traffic between Indian ports and Novorossiysk increased sevenfold in 2024.