Russia-Iran Trade Ties Set To Boom As Raisi Visits Moscow

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By Chris Devonshire-Ellis

Increasing ties will have significant regional trade impact from India to Azerbaijan 

Russian President Vladimir Putin discussed the development of bilateral economic relations and international cooperation with Iranian President Ebrahim Raisi in Moscow yesterday (Wednesday 19 January). Bilateral trade increased by over 38% in 2021 as Iran signed off a Free Trade Agreement with the Eurasian Economic Union. These ties, as well as regional security issues are set to strengthen – Iran has also joined the Shanghai Cooperation Organisation (SCO), now busy in preserving relative peace and some assistance to Afghanistan while the situation there remains fragile. Iran has a border with Afghanistan and is a key partner in the SCO plans to stabilize and reconstruct the country.

Turning to international cooperation, Putin said that Russia and Iran are able to assist the Syrian government, as that country also recovers from civil war. Syria joined China’s Belt and Road Initiative last week, while Iran has signed off a 25 year cooperation agreement with Beijing and is discussing a similar, 20 year agreement with Moscow – hence the meetings.

President Raisi in turn spoke in favour of further developing bilateral economic, trade, cultural, political, and military relations with Russia. “In the current, very exceptional conditions, where there is opposition to the unilateral actions of the West, including the United States, we can create synergy in our interaction,” Raisi said, and stated that Iran would continue to develop despite Western sanctions and threats, and would work on establishing mechanisms for the gradual lifting of all sanctions and restrictions.

Iran and Russia had a trade turnover of US$1.595 billion in 2019, of which Russia exported US$1.198 billion to Iran, and imported goods to the value of US$392 million from Iran. Most of this trade is within the energy sector, but there are avenues to develop trade in the agricultural and electronics industries.

Iran is a key player in the International North-South Transportation Corridor (INSTC) which bisects the country north-south via the Chabahar and Bandar Abbas Ports on the Arabian Gulf to the Anzali Port on the Caspian Sea. That provides multimodal connectivity to India and Pakistan, as well as to East Africa to the south, and to Russia, Azerbaijan, Turkey and across to Central Asia to the north and east.

Raisi will also address the Russian State Duma (Parliament) and will hold a range of business and development meetings during his visit.

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