Iran claims Russia trade could go to India via Chabahar

Iranian pro-regime media Mehr news reported on Wednesday that “India and Iran plan to step up the operationalization of the International North-South Transportation Corridor in a move to boost trade with Russia,” according to Mohammad Miri, an advisor to the Chabahar Free Zone in Iran.

The report says that it is building on previous agreements to push through a “trial shipment to test trade links from Russia to India [that] will be attempted in the next 6-8 months.” The report was based on a separate report at a media called Mint, but Iran's reprinting of it means Iran likely agrees that this is part of the Iranian trade agenda. 

This would be a serious move for the three countries because Russia wants to re-orient its ties to the east and would prefer more trade with Iran and India. Russia’s invasion of Ukraine has meant that it faces pressure from the West. Trade with Russia is also controversial and the West wants countries like India, South Africa and others to reduce ties with Russia. However, various groups like BRICS that include Russia, China, India and South Africa and Brazil are reluctant to follow the US demands. In addition Iran wants to move into these groupings of countries to counter the US-led world order.  

According to Mehr the new “shipment will go through the strategically vital Chabahar Port, while an earlier shipment in 2022 went through the more established Bandar Abbas port, Indian business and financial daily newspaper Mint reported.” According to this report, the trade would be part of Iran’s investment in the North-South Transport Corridor (INSTC). Iran has been talking this up a lot recently. It wants stronger ties with Central Asian states and Russia. It wants to send trade via the Caspian and Caucasus countries.   

The report in Iranian media claims that the trade corridor to Chabahar is 7,200km long. It links India, Iran, Azerbaijan, Russia and Central Asia and Europe. However, Europe may no longer want part of this. Turkey, though, is another matter. Ankara recently held important meetings with Saudi Arabia. Arab News notes that “Saudi Arabia has maintained deep ties with Central Asian countries and hopes to strengthen them in the future, said a top government official.”

US sanction spotlights

Reports said on Wednesday that Kyrgyzstan is now in a US sanctions spotlight. However, the country “has not been informed by the United States of possible action against Kyrgyz companies, a senior Kyrgyz official said, after a US paper said Washington was considering such a move to halt Russia using Kyrgyz firms to circumvent sanctions,” according to VOA. “The Kyrgyz official said the Central Asian country would view being singled out in any sanctions package as unfair.” The Washington Post called this a “hidden pipeline” that supplies Russia with “banned tech.” Reports say tech also comes via Kazakhstan.  

This raises questions about how Iran might operationalize the corridor. Iran would like to sit astride this trade route. However Iran faces its own sanctions hurdles and its infrastructure needs investment. A deal with China was supposed to improve things. There is a lot of history here going back to the era of the Great Game competition between the British Empire and Russia in Central Asia and Russia’s invasion of Afghanistan. Can Iran actually knit this area together. “Since 2000, there have been numerous efforts and negotiations on the part of member countries to activate this route,” Merh news admits. “Freight transit through Iran's territory lasts almost a third of the previous route from Russia to India through the Black Sea.” 

The report says that “last month in May, the agreement for financing the construction of the Rasht-Astara Railway was signed between Iran and Russia. As per this agreement, Due to the importance of the INSTC for international transit in the region, Russia has been determined to finance this railway project with approximately €1.6 billion in investments. This project is expected to be constructed within 48 months.”

India has key ties to the Gulf and also the US and countries in the Quad as well as the I2U2 group which includes the US, Israel and UAE. The Quadrilateral Security Dialogue (QSD), known as the Quad, is a strategic security dialogue between Australia, India, Japan and the US. India may prefer those partnerships to a questionable trade corridor with Iran and Russia. Previous reports said that Iran is not satisfied with India’s commitment. There is no doubt there are many reports in various media about this route, but they do not always come to fruition.