Azerbaijan, Iran Expand Transport, Trade Ties

The Azerbaijani and Iranian state railway companies have signed a strategic cooperation plan.

Chairman of Azerbaijan Railways CJSC (ADY), Rovshan Rustamov, and the head of Islamic Republic of Iran Railways, Jabbar Ali Zakeri Sardrudi, signed a Strategic Cooperation Plan for the Implementation of the Astara Terminal Construction and Operation Agreement during the 16th meeting of the Azerbaijan-Iran Joint Economic Cooperation Commission, held in Tehran on January 21–22, according to the ADY.

The document includes the approval of the Master Plan for the Astara cargo terminal, located on the Azerbaijan-Iran border, the completion of construction by the end of 2025, the recognition of final investments, and other related matters.

Addressing the meeting, Iranian Minister of Roads and Urban Development, Farzana Sadiq, emphasized the corridor’s importance as a major transit route, particularly highlighting the Resht-Astara section as a critical component.

The Rasht-Astara railway, scheduled for completion by 2028, will enhance regional logistics by linking the rail networks of Azerbaijan and Iran. This direct connection is expected to improve the efficiency of the Astara terminals, increase cargo volumes, and shorten transit times. For instance, goods transported from St. Petersburg to Mumbai could take just 10 days, compared to the 30-45 days required by sea. The enhanced infrastructure will attract more trade and investment, benefiting both economies.

Sadiq underscored Azerbaijan’s strategic position between Russia and Iran, making it a vital hub for freight transportation among the three countries. She also noted that mutual understanding between Azerbaijan and Iran is essential for the successful development and completion of the corridor project.

The minister highlighted that trade between Iran and Azerbaijan reached $480 million in 2023, growing by 20% to $580 million in 2024.

Sadiq further provided updates on infrastructure projects, including the construction of a road bridge across the Araz River on the Azerbaijan-Iran border, expected to be completed this spring. She also mentioned a road project starting from the Aghband settlement in Azerbaijan’s Zangilan district, passing through Iran to Julfa in Nakhchivan, an Azerbaijani exclave separated from the country's mainland.

The Horadiz-Aghband railway line in Azerbaijan, spanning 110.4 kilometers, will feature over 300 artificial structures, including more than 40 bridges, tunnels, culverts, and galleries. This railway line will provide a direct transport link to Nakhchivan, facilitating new freight routes between the East and the West. Notable components of the railway include a 771-meter-long railway bridge, Azerbaijan’s longest railway tunnel at 1,071 meters, and the country’s first-ever gallery designed to protect the railway from rock avalanches.

The Astara terminals in both Azerbaijan and Iran will ensure faster and more efficient handling of growing cargo volumes along the International North-South Transport Corridor (INSTC). These developments will help realize the corridor's strategic potential, strengthen the transport infrastructure of both countries, and promote regional trade. Once completed, the INSTC is projected to handle 15 million tonnes of transit cargo annually. In 2024, the volume of transit cargo transported through Azerbaijan via the corridor reached 814,000 tons, marking a 28% increase compared to 2023.

A trilateral meeting of Azerbaijani, Iranian, and Russian transport ministers is set to take place in Moscow on January 28 to discuss measures to enhance the corridor's transit potential.

In addition to railway agreements, the Commission meeting resulted in important agreements on energy, oil and gas, water, and agriculture. Both sides also agreed to expedite the signing of a preferential trade treaty to expand bilateral trade relations.

On January 21, during a meeting with Azerbaijani Deputy Prime Minister Shahin Mustafayev, who led an economic delegation to Tehran, Iran’s President Masoud Pezeshkian called for maintaining and increasing joint energy and logistics cooperation with Baku. He expressed hope that these efforts would lead to a “strategic partnership” between the two nations.

In response, Mustafayev assured Tehran that Baku is interested in pursuing joint long-term projects in transport, logistics, and energy sectors. He also extended President Ilham Aliyev's invitation to President Pezeshkian to visit Azerbaijan.

In a separate meeting, Iranian Oil Minister Mohsen Paknejad emphasized the importance of sustained energy cooperation with Azerbaijan and announced the formation of a joint task force to facilitate strategic and technical collaboration in the energy sector.

Mustafayev noted that this was his second meeting with the Iranian oil minister in three months. He emphasized the significance of reciprocal visits in fostering a deeper understanding of each country’s capacities and infrastructure.