Russia discusses trade and economic development with Iran

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Russia is seeking to improve its access to trade connectivity with the Middle East and South Asia, with Iran being strategically important to enable it to do so. Russia has access to the Caspian Sea through its ports in Astrakhan, which allows sea transport south to Iran’s Caspian ports at Anzali, among others. From there the road, and from the beginning of 2023, rail transport can continue south to Bandar Abbas and the ports of Chabahar providing access to the Persian Gulf.

To soften these developments, Russian Economic Development Minister Maxim Reshetnikov met with Iranian Central Bank Governor Ali Salehabadi last Thursday (July 7), during which the importance of continuing the development of cooperation in finance and banking, as well as in transport and logistics was highlighted. This mainly focuses on trade along the International North-South Transport Corridor (INSTC) which bisects Iran from north to south and provides access to Russia, the Middle East, East Africa and to South Asia.

A statement was later released by the Russian Foreign Ministry, stating that “Russia and Iran give special priority to the implementation of joint investment projects, including in the field of port infrastructure development for a full-fledged launch of the international North-South transport corridor. The interest in the development of logistics and service centers for the transshipment of Russian goods in Iranian ports in the Caspian Sea and the Persian Gulf was particularly highlighted.

A memorandum prepared by the Ministry of Economic Development jointly with interested agencies and organizations on the development of long-term cooperation between Russia and Iran in the trade and economic sphere would facilitate the realization of the current trade potential, as well as a free trade agreement between the Eurasian Economic Union and Iran. A temporary agreement is currently in place leading to the formation of a free trade area, and the completion of domestic procedures to ratify a protocol to expand it is expected in Russia in the near future.

The conclusion of a permanent agreement on a free trade area between the Eurasian Economic Union (EAEU) and Iran will allow the deregulation of 80% of the volume of trade and goods and will further enhance the viability and competitiveness of goods Russians on the Iranian market and vice versa. The EAEU also includes Armenia, Belarus, Kazakhstan and Kyrgyzstan, all accessible from the INSTC.

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