Russian President Vladimir Putin and his Iranian counterpart Ebrahim Raisi practically oversaw the signing of a $1.7 billion intercontinental rail system that Moscow says will rival the Suez Canal as a key global trade route.
The deal between Moscow and Tehran is to fund the Rasht-Astara railway, which will connect India, Iran, Russia, Azerbaijan and other nations via a sea route as part of the North-South International Transport Corridor.
“The unique north-south transport artery, which includes the Rasht-Astara railway, will help significantly diversify global traffic flows,” Putin said.
Russian President Vladimir Putin attends the ceremony to sign an agreement on the construction of the Rasht Astara railway with Iranian President Ebrahim Raisi via video conference on Wednesday, May 17, 2023 at the Kremlin in Moscow. (Mikhail Klimentyev, Sputnik, Kremlin Pool Photo via AP)
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According to the Iranian Ministry of Transport and Urban Development, Russia will invest $1.7 billion in the railway line. However, it was not specified whether Iran would also help fund the railway system, the Tehran Times reported.
Iran and Russia are subject to international sanctions restricting trade, and both world leaders have felt an expansion of ties is necessary to counter Western dominance.
It’s unclear if the trade route will be affected by international restrictions, but some reports suggest it could be “sanction-proof”.
Iran’s Minister of Roads and Urban Development Mehrdad Bazrpash and Russia’s Transport Ministry Vitaly Savelyev sign an agreement on the construction of the Rasht-Astara railway during a ceremony in Tehran, Iran May 17, 2023. (West Asia News Agency/Handout via Portal)
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“Without a doubt, this agreement is an important and strategic step towards cooperation between Tehran and Moscow,” Raisi said, referring to the 100-mile railway that will run along the Caspian Sea.
Putin endorsed the deal as an important part of connecting the Baltic Sea to Iranian ports in the Indian Ocean and Gulf.
Iranian tourists on a shore of the Caspian Sea in the city of Anzali, 227 miles north of Tehran, March 29, 2023. (Morteza Nikoubazl/NurPhoto via Getty Images)
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The deal signed on Wednesday is just the latest in a series of agreements and partnerships made by Moscow and Tehran amid increasingly strained relations with the West and its allied nations.
Iran’s Transport Minister Mehrdad Bazrpash reportedly met with Russian President Igor Levitin’s special envoy in January to not only review the rail deal, but also to discuss how Iranian and Russian cooperation can be expanded even further – suggesting that future plans may also be in the works.
Portal contributed to this report.