Russian President Vladimir Putin and his Iranian counterpart, Ebrahim Raisi, on Wednesday oversaw, via video link, the signing of a deal to accelerate the building of a commercial link between the north and the south to increase trade through subverting the Suez Canal and the international sanctions.
This agreement has remained a matter of discussion for years.
The missing link is a 164-kilometer railroad between the city of Rasht, the capital city of Gilan Province, and the city of Astara in the namesake province on the border with Azerbaijan.
The Rasht-Astara railway is seen as an important link in the corridor, intended to connect India, Iran, Russia, Azerbaijan, and other countries via railways and sea - a route that Russia says can rival the Suez Canal as a major global trade route.
Russia will invest $1.6 billion in this railway route while Iran will handle the construction.
Iran and Russia, who are subject to sanctions by Western states and the US, aim to conclude the corridor project which is a network of maritime routes, railways, and land routes to allow the passage of Russian goods to the Indian Ocean without passing through the western maritime lanes and the Suez Canal.
“The unique North-South transport artery, of which the Rasht-Astara railway will become a part, will help to significantly diversify global traffic flows,” Putin said.
“The transportation of goods through the new corridor will have a significant competitive advantage,” he argued.
“The delivery of goods from Saint Petersburg (in Russia) to Mumbai (in India) will take about 10 days, compared to the journey through traditional trade routes that takes 30 to 45 days.”
“Without a doubt, this agreement is an important and strategic step in the direction of cooperation between Tehran and Moscow,” Raisi said.
The Iranian President noted the "great potential" in ties with Russia.
IRGC-affiliated Fars news agency quoted Iranian Ambassador to Moscow Kazem Jalali as saying that once this part is finalized then the link between Saint Petersburg Port and the Gulf will be completed.
The signing of the agreement coincided with the visit of Russia’s Deputy Prime Minister Alexander Novak to Tehran.
Meanwhile, the Head of Iran's Trade Promotion Organization (TPO), Alireza Peyman-Pak, has announced that Russia's second-largest bank VTB has opened a representative office in Iran.
“After continuous efforts and support from the Trade Development Organization, VTB Bank, the second largest Russian bank, has opened its representative office in Iran,” he said.
He noted that VTB is the first Russian bank to open a representative office in Iran.
On Tuesday, Washington warned that Iran and Russia were "expanding their unprecedented defense partnership".
"Interactions between Iran and Russia in matters regarding the selling of advanced weapons — especially more advanced UAVs — are now continuing," White House national security spokesperson John Kirby told reporters
Iran has transferred more than 400 armed drones to Russia since August, he added.
Tehran has repeatedly considered these accusations as “baseless”, confirming that it does not take part in the conflict.
“A top issue in talks between Presidents Raisi and Putin has been the North-South Corridor,” Deputy Chief of Staff for Political Affairs to Iran President Mohammad Jamshidi tweeted.
“Unlike Jake Sullivan's Cold War mentality and plan, this is to integrate not polarize,” he added.
