Presidents Raisi and Putin Discuss Iran-Russia INSTC Connectivity
Direct rail route via Azerbaijan should be completed by mid 2025
The President of Iran, Ebrahim Raisi and the Russian President, Vladimir Putin have discussed the development of the International North-South Transport Corridor. Earlier this year, Russia and Iran signed an agreement on the construction of one significant part of the North-South Corridor – a railway section between Rasht and Astara, which passes through Azerbaijan.
The Presidents of the two countries discussed the importance of accelerating bilateral trade and economic agreements and called the Tehran-Moscow cooperation model in regard with the North-South Transport Corridor a successful example for mutual understanding between the two countries.
According to the agreement, the construction of this railway will cost the Russian side €1.6 billion (₽150.7 billion, or ﷼ 74 trillion). The railway is planned to be in operation within 48 months.
Iran has also been negotiating a US$5 billion loan from Russia, most of which is INSTC related, and includes the purchase of up to 1,300 locomotives.
The Rasht-Astara line will be approximately 170 km long. It is needed to connect the landlocked sections of the North-South International Transport Corridor, which will enhance the economic efficiency of the Trans-Caspian route. The railway line is expected to be built with the participation of Moscow and Tehran, while the Astara (Iranian city) – Astara (the identically named Azerbaijani city) line will involve Moscow, Baku, and Tehran. It is faster and less expensive than the traditional Suez Canal route.
The ’Northern Corridor’ of the INSTC will provide direct connectivity and transport routes between South Asia, the Middle East, Iran, Azerbaijan and onto Russia, as well as vice-versa. It is an integral part of both Iranian and Russian plans to develop new markets in the wake of sanctions.
2022 trade turnover between Russia and Iran increased by 20% year on year; and reached some US$4.9 billion. That growth dynamic can be expected to continue. Iran also has a Free Trade Agreement with the Eurasian Economic Union, which includes Russia in addition to Armenia, Belarus, Kazakhstan, and Kyrgyzstan.