TL;DR: Russia and Iran will sign a €1.6 billion deal in November 2025 to build the Rasht-Astara railway, the final piece of the International North–South Transport Corridor (INSTC), linking Russia, Iran, and India via Azerbaijan. The 162 km line aims to boost regional trade, bypass the Suez Canal, and enhance Eurasian connectivity within five years.
What Happened
- Russia and Iran will finalize an agreement in November 2025 to construct the 162-165 km Rasht-Astara railway in northern Iran’s Gilan Province.
- The project forms the last missing segment of the International North-South Transport Corridor (INSTC), a 7,200 km route connecting Russia to India through Iran and Azerbaijan.
- The railway aims to cut cargo transit time from 45-60 days (via Suez Canal) to about 10-15 days and reduce transportation costs by up to 30%.
Project Details
- Russia will finance most of the €1.6 billion cost through a low-interest (3%) loan; Iran will fund the rest.
- The line will have up to nine stations, 56 bridges, and 35 overpasses, addressing complex mountainous terrain.
- Construction will begin after March 2025 and is expected to take about 48 months.
- Once operational, the corridor could carry 15 million tons of cargo annually in its first phase.
Official Statements
- Iran’s Roads and Urban Development Minister Farzaneh Sadegh said, “The Rasht–Astara railway fills the missing link in the INSTC. We plan to complete land acquisition by year-end while Russia begins construction preparations.”
- Iran’s Ambassador to Azerbaijan Mojtaba Demirchilou noted that “the corridor will benefit Iran, Azerbaijan, and the broader region,” stressing improved customs and border efficiency.
Background and Context
- The INSTC was initiated in 2000 by Iran, Russia, and India to enhance north-south trade connectivity and reduce dependence on Western-controlled maritime routes.
- Progress had stalled due to sanctions and funding gaps, but momentum returned after 2022 as Russia sought sanction-resistant trade channels.
- A 20-year Comprehensive Strategic Partnership Treaty signed by Presidents Putin and Pezeshkian in January 2025 underpins this cooperation, followed by a transit roadmap in February 2025.
Strategic Impact
- The corridor strengthens trade between Russia, Iran, India, and Azerbaijan, offering an alternative to the Suez Canal.
- It positions Iran as a major Eurasian transit hub and gives Russia direct rail access to the Indian Ocean for energy and goods exports.
- The project aligns with BRICS+ trade ambitions and provides Central Asian countries with a faster maritime alternative via Iran’s ports.