Progress Made on Russia-India Trade Route via Central Asia

  • March 18, 2024
  • News

Progress continues on a long-planned shipping route linking Russia with the Middle East and South Asia, as sanctions-hit Moscow explores alternative markets for its products, triggering wide-ranging geopolitical effects.
The 7,200-kilometer International North-South Transport Corridor will stretch from St. Petersburg in northwestern Russia to southern ports in Iran, continuing to Mumbai. This route will offer a shorter path than the current one through the Mediterranean Sea and the Suez Canal, bypassing Europe.

The corridor offers three routes between Russia and Iran. The main western route passes through Azerbaijan via rail and road, while the central route crosses the Caspian Sea by ship, and the eastern route follows the Caspian Sea’s eastern shore.

Significant progress has been made on the western route, with Azerbaijan’s Ministry of Digital Development and Transport reporting a 30% increase in rail freight and a 35% rise in road freight to 1.3 million tonnes last year. Azerbaijan aims to expand total freight traffic to potentially reach 30 million tonnes per year.

Azerbaijan is rapidly developing domestic infrastructure to enhance shipping on the western route, including a railway and road crossing the Aras River along its border with Iran. Additionally, a shipping terminal in the border region is being expanded, with completion scheduled for the third quarter of this year. Azerbaijan recently opened a four-lane toll road linking its capital, Baku, with the Russian border, following the opening of a customs checkpoint in the area in March 2023.

The North-South Transport Corridor is expected to promote mutually beneficial trade and investment, opening up new cooperation opportunities between countries, according to the transport ministry.

While plans for the corridor were initially agreed upon by Russia, Iran, and India in 2000, recent geopolitical changes have accelerated the project. Western sanctions imposed on Russia after its invasion of Ukraine have prompted Moscow to seek export markets in Asia and the Middle East. Sanctions have also driven Iran closer to Russia and Asian countries.

Moscow and Tehran signed an agreement last May to construct a railway in northern Iran, completing a missing link in the corridor.

The growing threat to shipping from Europe to Asia via the Suez Canal, as pro-Iranian Houthi rebels attack commercial vessels in the Red Sea, further boosts the importance of the corridor.

Russian Deputy Prime Minister Alexei Overchuk stated in January that the corridor would gain global significance given the situation in the Red Sea region. Indian External Affairs Minister S. Jaishankar echoed this sentiment, stating that the corridor’s progress is in the interest of the global economy.

The corridor has also impacted military developments in the region. Iran has supplied Moscow with drones and other equipment, and Azerbaijan’s closer ties with Russia have provided it with an advantage in its conflict with Armenia over the historically disputed region of Nagorno-Karabakh.

Armenia, concerned about the geopolitical shifts brought about by the corridor, has proposed its project called “Crossroads of Peace,” which aims to reopen its borders with Azerbaijan and Turkey through a network of north-south and east-west rails and roads.