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Akbar Novruz

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The Russian government has approved a draft agreement to jointly develop transit cargo transportation along the North-South international transport corridor. Signed by Russian Prime Minister Mikhail Mishustin, this agreement aims to increase the corridor's efficiency and potential, linking Moscow and Baku. By ensuring the free movement of goods through both countries' territories, the agreement sets the background for a robust and dynamic trade route, with projected annual cargo volumes set to rise to 15 million tons by 2030.

But, what is this project?

The International North-South Transport Corridor (INSTC) is primarily designed for transporting cargo from India and the Persian Gulf region to Russia, Western Europe, the Baltic States, and Scandinavian countries. The main advantage of the North-South Transit Corridor compared to other routes is that the transit distance and time are reduced by two to three times. Now, imagine a trade route that stretches from the Indian Ocean and the Persian Gulf to the Baltic Sea—one that promises to revolutionize the flow of goods between continents. This is the potential of the North-South Corridor, a strategic transport link where Azerbaijan stands at the very heart of transforming global trade. While this corridor already facilitates significant exchanges between Iran, Russia, and Azerbaijan, its true power is still unfolding, with much more on the horizon.

Prospects, hidden potential

Today, the North-South Corridor is primarily used to transport goods between Iran, Russia, and Azerbaijan, bypassing traditional trade routes. However, with sanctions currently in place on both Iran and Russia, many countries have yet to fully embrace the opportunity this route offers. But the future looks bright. As geopolitical conditions evolve and sanctions ease, the corridor will become a vital trade passage, attracting Northern European and Southern countries eager to take advantage of its speed and efficiency.

One of the most exciting developments is the Rasht-Astara railway, which is slated for completion in 2027-2028. Being developed by Russia, this railway will supercharge the North-South Corridor’s capacity, allowing goods to travel between the Indian Ocean and the Baltic Sea in just 10 days. This swift, cost-effective route promises a wealth of opportunities, benefiting not just the countries involved, but the entire global trade network.

In addition, a recent high-level visit has signalled that the North-South Corridor’s reach is about to get much broader. A delegation led by Rovshan Rustamov, Chairman of Azerbaijan Railways CJSC (ADY), travelled to Iran, where they toured critical railway infrastructure in the city of Julfa. Among the most significant discussions was the construction of a railway bridge over the Araz River—a joint project between Azerbaijan and Iran that will directly link Nakhchivan with the rest of Azerbaijan. This bridge will create an uninterrupted land corridor, further strengthening regional trade flows and connectivity.

While in Julfa, the ADY delegation also visited a wheel pair replacement facility, an essential piece of the railway puzzle to ensure the smooth operation of vehicles. But the most exciting stop was in the Iranian city of Astara, where Rustamov met with Jabbar Ali Zakeri Sardroudi, head of Iranian Railways. Here, they delved into the future of the Astara terminal, which is undergoing major developments that will enhance its capacity and efficiency. By the end of 2025, this terminal will play a critical role in turning the North-South Corridor into a truly dynamic trade route.

Perhaps the most compelling sign of the corridor’s growing importance is the expansion of the "Southern Cargo Terminal" LLC, which manages terminals in both Azerbaijan and Iran. This expansion is expected to streamline operations, reducing bottlenecks and vastly improving logistical efficiency. The terminal will be pivotal in connecting the Asian, European, and Middle Eastern markets, cementing its status as a key gateway for trade in the region.

This collaboration between Azerbaijan and Iran is setting the stage for an even more integrated and prosperous trade corridor. As the terminal’s capacity grows and new infrastructure projects are completed, the North-South Corridor will become a central piece of Azerbaijan’s economic puzzle, further enhancing its role as a key player in global trade.

The North-South Corridor is not just a transportation route; it’s an opportunity to reshape how goods move between continents, connecting Asia, Europe, and the Middle East like never before. Azerbaijan is positioning itself as a linchpin in this evolving global trade network, investing in infrastructure, forging strategic partnerships, and pushing forward with projects that will make this corridor a mainstay in the global economy.

With projects like the Rasht-Astara railway, the Araz River bridge, and the expansion of key terminals, Azerbaijan is setting the stage for a future where this corridor will become one of the most important trade arteries in the world.

Even though the Azerbaijani government has removed/paused the clause regarding the Zangazur Corridor issue from the peace deal between Armenia, this actually emphasizes this project's importance. Russia urgently needs the transport corridor; it is, in fact, a matter of strategic necessity for Moscow. Access to Middle Eastern markets could greatly boost Russia's economic dynamics, enhance international trade, and provide other benefits.

Consequently, Russia is actively pursuing the launch of the Zangazur corridor. If the corridor becomes operational, it would enable integration with the North-South corridor, allowing railway transit through Armenia and Nakhchivan to reach Julfa, where they could connect with the Iranian railway system. However, it is indeed yet to be decided regarding the issue. One thing is for sure, as Azerbaijan strengthens its role as a trade hub, the North-South Corridor will undoubtedly transform the landscape of global commerce, bringing new economic opportunities to the region and beyond.