Russia and Iran sign deal to build railway line for new trade corridor

Russia’s president Vladimir Putin signed the deal with Iran’s president Ebrahim Raisi via video link (Image: Reuters)

Russia and Iran’s presidents have signed a deal to finance and build an Iranian railway line that will form part of a new international north-south trade corridor.

The Rasht-Astara railway will serve as a link in the corridor, intended to connect India, Iran, Russia, Azerbaijan and other countries via railways and sea.

Russia claimed that the route that Russia says can rival the Suez Canal as a major global trade route.

Russia’s president Vladimir Putin said the 162 km (100 mile) railway along the Caspian Sea coast would help to connect Russian ports on the Baltic Sea with Iranian ports in the Indian Ocean and the Gulf.

He added, “The unique North-South transport artery, of which the Rasht-Astara railway will become a part, will help to significantly diversify global traffic flows.”

Iran’s president Ebrahim Raisi called the agreement “an important and strategic step in the direction of cooperation between Tehran and Moscow”.

Russia and Iran have been pushed to strengthen their political and economic ties by Western economic sanctions on each, which both say are unjustified.

Since the 1979 Islamic Revolution that swept U.S.-backed Shah Mohammad Reza Pahlavi from power, Iran has been ostracised by the West and its economy crippled by a myriad of sanctions. It holds around a quarter of the Middle East’s oil reserves.

The West also imposed other set of restrictions over Iran’s nuclear program, while Russia was sanctioned due to its actions in Ukraine.