Iran’s envoy to Russia predicts surge in 2025 bilateral trade
Iran’s Ambassador to Russia Kazem Jalali outlined several factors that could lead to a significant boost in trade between Iran and Russia by 2025, which include upcoming presidential talks, the implementation of further steps in a bilateral monetary and banking agreement, the start of Iran’s free trade agreement with the Eurasian Economic Union (EAEU), and geopolitical developments.
Talking to IRNA, Jalali referred to the $5-billion trade volume between Iran and Russia in 2024 and said the figure is not up to par, given the untapped potential for cooperation.
He identified five key obstacles hindering bilateral trade, including a lack of mutual understanding, transportation issues, customs procedures, financial and monetary challenges, and logistical bottlenecks.
Jalali highlighted the importance of Iranian President Masoud Pezeshkian’s upcoming visit to Moscow on January 17, 2025, where ministers from both countries will discuss bilateral projects in the presence of the two presidents.
A comprehensive cooperation agreement is expected to be signed, marking a significant step in removing trade barriers and expanding relations across various sectors.
The ambassador noted that Russia’s perspective on Iran has shifted due to geopolitical changes, particularly after the Ukraine war began on February 24, 2022.
Previously, Russia did not view Iran as a key economic partner, focusing instead on security and political ties. However, in the past three years, Russia has sought to enhance economic relations with Iran, exploring ways to streamline transportation routes and utilize Iran for both imports and exports.
Jalali emphasized the need to address the five major obstacles to trade, stating that Iran has significant economic potential and can play a much larger role in the Russian market.
He also mentioned the initial implementation of a monetary agreement between Iran and Russia, which allows Iranian bank cards to withdraw rubles from Russian ATMs. The second and third phases of this agreement, enabling Russian and Iranian citizens to use their bank cards in each other’s countries, are expected to be operational in the first and second halves of 2025.
Jalali described 2025 as a pivotal year for resolving financial and monetary issues in Tehran-Moscow relations, citing progress in central banks negotiations.
He also pointed to the implementation of a free trade agreement between Iran and the five Eurasian Economic Union (EAEU) member states in 2025, which will eliminate customs tariffs on approximately 9,000 goods. This agreement, signed in St. Petersburg in December 2024, has already been ratified by the parliaments of the EAEU countries and Iran’s parliament, pending final approval by Iran’s Guardian Council.
With Russia being the largest economy in the EAEU, Jalali predicted that 2025 will offer a golden opportunity to boost trade with Russia and other member states, as 87% of goods will be exempt from tariffs.
He also expressed optimism about the future of bilateral trade, anticipating improvements in banking and customs procedures, the completion of the Rasht-Astara railway, and enhanced economic integration between the two countries.
Current status of INSTC
Jalali provided an update on efforts to develop the Rasht-Astara railway, a key missing link in the western branch of the International North-South Transit Corridor (INSTC).
He reported that in 2024, an estimated 1.8 to 2 million tons of goods were transported along the eastern branch of the corridor, which runs through Russia, Kazakhstan, Turkmenistan, and Iran. The corridor has a capacity of 15 million tons, with 650,000 tons transported in 2023, its first year of operation.
The ambassador also noted that the multimodal land-sea route via the Caspian Sea has a capacity of 12 million tons, with 8 to 10 million tons currently in use.
Additionally, 3 million tons of goods are transported annually along the western land route through Azerbaijan.
Jalali acknowledged ongoing customs issues in Russia, Azerbaijan, and Iran but noted improvements in Russian customs, except in Astrakhan. He called for enhanced coordination among the three countries to resolve these challenges.
Jalali identified a deficiency of suitable cargo ships in the Caspian Sea as a major obstacle to trade along the middle route of the INSTC.
He stressed the need to strengthen maritime navigation and port infrastructure in both Iran and Russia.
In a previous statement, Jalali confirmed that Pezeshkian will visit Moscow on January 17, 2025, to sign a comprehensive cooperation agreement with his Russian counterpart Vladimir Putin, further solidifying bilateral ties.