Russia and Iran are collaborating to establish a new trade channel as a means to circumvent existing restrictions. The proposed route is anticipated to span from the eastern periphery of Europe, namely Ukraine, to the Indian Ocean, including a distance of around 3,000 kilometers. Both nations are investing significant amounts of capital in the construction of road, maritime, and railway infrastructure along the designated pathway. This development aims to facilitate market entry for Russian enterprises into regions such as Iran, India, Asia, and the Middle East. It is anticipated that the sea, river, and rail networks will be expanded to connect Iranian centers located on the Caspian Sea, ultimately extending to the Indian Ocean.

Numerous Russian and Iranian motives and goals, which in turn have significant geopolitical significance, are behind the establishment of this trade route. Initially, both nations encountered severe sanctions, resulting in a profound adverse effect on their economies. This is particularly relevant given Russia’s ongoing war in Ukraine and Iran’s use of Iran’s nuclear goals. Iranian authorities frequently discuss the act of turning their attention eastward, whereas the Russian government has prioritized this strategic move to forge closer ties with its neighbors and the Asian region. The Russian government has committed to allocating a substantial investment of €1.6 billion towards the development of the railway route, with an anticipated completion timeline of 48 months. The cities of Moscow and Tehran have agreed to collaborate in providing financial support for the design, development, and procurement of products and services. The North-South International Transport Corridor (ITC) serves as a crucial link between Russia and the nations situated in the Caspian basin, the Persian Gulf, Central, South, and Southeast Asia. The western corridor, including Russia, Iran, and Azerbaijan, had a geographical discontinuity of 162 kilometers  between the cities of Rasht and Astara.

There are several possible reasons why Russia and Iran are building a transcontinental trade route that connects the eastern edge of Europe to the Indian Ocean. Firstly, both nations want to defy Western sanctions and create sanctions-proof supply chains. Both countries are under tremendous pressure from sanctions imposed by the United States and its allies over issues such as Iran’s nuclear program, human rights violations, support for terrorism, Russia’s invasion of Ukraine, and the annexation of Crimea. By building a trade route that is beyond the reach of any foreign intervention, both countries can maintain their economic and political sovereignty. Secondly, both countries want to diversify markets and increase their trade with Asian countries such as China, India, and the Middle East. The new trade route would allow them to shave thousands of kilometers off existing routes and reduce transportation costs and time. It would also provide them with new opportunities to export their energy resources, agricultural products, and manufactured goods to Asian countries and import technology, consumer goods, and investment from them. Lastly, both states want to strengthen their strategic partnership and regional influence. They have a similar worldview that opposes the United States and the liberal international order and supports multipolarity. They have also cooperated on shared interests such as supporting the Assad regime in Syria, countering terrorism and extremism, and stabilizing Afghanistan.

From an economic perspective, The Russian change is mostly motivated by need, as Moscow endeavors to seek solace in the Eastern region, particularly in China, as a means to counteract Western endeavors aimed at isolating Russia and challenging Western-imposed sanctions. Russia and Iran have recognized that a land corridor presents more challenges for Western surveillance and monitoring compared to marine routes. Consequently, this corridor offers both nations a means to transit weapons and commodities between each other and to other markets while minimizing the impact of sanctions. Furthermore, the Russian, Iranian, and Chinese governments challenge the established Western order and actively pursue modifications to the existing rules and norms.

Iran is strategically positioning itself between Russia and China in a calculated manner to mitigate Western pressures and endeavors to compel its compliance with a new nuclear agreement. Iran wants this trade route to protect commercial ties and corridors from Western influence and interference while establishing economic infrastructure that facilitates connectivity between the economies of Asia and Central Asia, with Russia and China assuming central roles. Due to its geographical closeness and inherent connections with several economies, Iran is poised to assume a crucial role in the establishment of novel trade networks and linkages. Also, Iran’s export of drones and medium-range missiles to Russia in support of its military operations in Ukraine is expected to intensify via this established trade channel since the Western powers lack effective means to prevent this escalation. Consequently, Moscow and Beijing are expected to significantly depend on Iran as a pivotal component of their overarching geopolitical strategy.

From a geopolitical lens, this route contributes to this objective by establishing a corridor that is autonomous from the Western region, effectively connecting Asia and Central Asia. The Russia-Iran-China triangle, despite its intricate nature, poses a significant risk to Western interests in the Middle East, Asia, and Central Asia, hence making it a perilous axis for the West. Such developments would challenge the existing Western order and its established frameworks. Furthermore, the establishment of this corridor will serve to enhance the bilateral ties between Russia and Iran, as both countries find themselves mutually dependent for many reasons, particularly in the realm of addressing the challenges of international isolation. Based on the current trajectory of diplomatic interactions, it is probable that regional and international endeavors aimed at addressing Iran would encounter significant obstacles due to Russia’s backing of Tehran in global arenas. Furthermore, Russia perceives Iran as an integral component of its geopolitical landscape. Consequently, any detrimental actions against Tehran are expected to have adverse consequences for Russia’s geopolitical ambitions.

Some of the potential challenges that Russia and Iran might face while building this transcontinental trade route The trade route passes through some of the most volatile and conflict-prone regions in the world, such as the Caucasus, Central Asia, and the Middle East. Conflicts over territory, religion, and ethnicity, as well as the presence of armed groups, terrorists, and separatists, plague these areas. The trade route could also become a target of sabotage or attack by hostile actors who oppose the interests of Russia and Iran. Additionally, the trade route competes with other established or developing corridors that link Europe and Asia, such as China’s Belt and Road Initiative, India’s International North-South Transport Corridor, and Türkiye and Azerbaijan’s support for the Trans-Caspian International Transport Route. These corridors offer alternative or complementary options for trade and transit that could undermine the attractiveness or viability of the Russia-Iran route.

This trade route could affect relations between Russia and Europe in the event of a further confrontation. The trade route could increase tensions and mistrust between Russia and Europe, especially in the context of the ongoing crisis in Ukraine and the recent Russian invasion. The trade route could be seen as a challenge or a threat to Europe’s interests and values, as well as to its alliances with the United States and NATO. Europe could impose more sanctions on Russia and Iran or even take military action to disrupt or block the trade route. This could lead to a spiral of escalation and conflict in the region. Also, the trade route could intensify the competition between Russia and Europe for influence and markets in Eurasia. The trade route could also create divisions or rivalries among European countries or regions, depending on their level of dependence on or engagement with Russia or Iran.

In conclusion, this trade route represents a notable advancement, as it will serve as a crucial means for Russia and Iran to circumvent Western sanctions and revitalize their economies. Additionally, it will serve as a platform for both countries to increase their defense cooperation and economic cooperation and enhance their existing strategic ties.

Disclaimer. The views and opinions expressed in this op-ed are those of the authors and do not necessarily reflect the official policy or position of MEPEI. Any content provided by our authors is of their opinion and is not intended to malign any religion, ethnic group, club, organization, company, individual, or anyone or anything.

About the author

Aishwarya Sanjukta Roy Proma

Research Associate at the BRAC Institute of Governance and Development (BIGD). She is a research analyst in security studies. She obtained her Master's and Bachelor's in International Relations from the University of Dhaka, Bangladesh. She can be reached at ash77662@gmail.com.