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World|politics|January 12, 2023 / 09:26 AM
Russia and Iran eye trade route with India to bypass sanctions

AKIPRESS.COM - Russia and Iran are working on a new shipping corridor that cuts Europe and its sanctions out of the picture, and are looking to partner with India, which has kept its distance from the Western-led isolation campaign against the two countries. Russian President Vladimir Putin and Iranian President Ebrahim Raisi discussed the proposed trade corridor in July 2022, Financial Tribune reported.

The new transcontinental trade route stretching from the eastern edge of Europe to the Indian Ocean, a 3,000–kilometer (1,860–mile) passage that’s beyond the reach of any foreign intervention.

The two countries are spending billions of dollars to speed up delivery of cargos along rivers and railroads linked by the Caspian Sea. Ship–tracking data compiled by Bloomberg show dozens of Russian and Iranian vessels, are already plying the route.

Russia and Iran, under tremendous pressure from sanctions, are turning toward each other and they’re, both looking eastward, too. The goal is to shield commercial links from Western interference and build new ones with the giant and fast–growing economies of Asia.

“This is about establishing sanctions–proof supply chains all the way through,” says Maria Shagina, an expert on sanctions and Russian foreign policy at the London–based International Institute for Strategic Studies. Shagina estimates Russia and Iran are investing as much as $25 billion in the inland trade corridor, helping to facilitate the flow of goods the West wants to stop.

The emerging trade corridor would allow Russia and Iran to save thousands of kilometers off existing routes. At its northern end is the Sea of Azov, which is bracketed by the Crimean Peninsula, Ukraine’s southeastern coast, including the Russian controlled port of Mariupol, and the mouth of the River Don.

Earlier, President Vladimir Putin said the Sea of Azov “has become an inland sea” for Russia. From there, river, sea and rail networks extend to Iranian hubs on the Caspian Sea and ultimately the Indian Ocean and India. Putin has flagged the importance of that end of the corridor, as well.

At an economic forum in September last year, Putin underlined the need to develop the ship, rail and road infrastructures along the route that “will provide Russian companies with new opportunities to enter the markets of Iran, India, the Middle East and Africa, and will facilitate supplies from these countries in return.”

The two countries have announced a raft of new business deals that cover goods, including turbines, polymers, medical supplies and automotive parts. Russia needs to compensate for the sudden breakdown of its commercial ties with Europe, which before the war was its biggest trade partner, as well as finding workarounds for US and European Union sanctions.

“With European transport networks getting closed off, they’re focused on developing alternative trade corridors which support Russia’s turn to the East,” says Nikolay Kozhanov, a Persian Gulf expert at Qatar University who served as a Kremlin diplomat in Tehran from 2006 to 2009.

Since the route’s announcement, experts all over the globe, including in India, have noted that this decision by Russia and Iran comes with both advantages and downsides for India. This may be beneficial for India, as India is a critical node in the network that both Russia and Iran are attempting to establish.

The success or failure of the two nations is beyond their control. It will depend on whether other nations, from India to the Middle East, who are also being pressured to comply with sanctions by the US and its allies, agree to do so or choose to reject the pressure. For such infrastructure to be created, exploited, and sustained, it would need not just the involvement of Russia and Iran, but also the engagement of all other nations within this corridor.

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