Resilience Through Linkage: Russia, Iran, and Aspirations for North–South Trade

This report examines the International North-South Transport Corridor (INSTC)—an ambitious, Russia-promoted 7,200 km (4,474-mile) road-rail-naval trade route currently under development that, if completed, would link Russia to the Persian Gulf and India through the South Caucasus and Central Asia. Although initiated in 2000 by Russia, Iran, and India, the INSTC has garnered increased interest and support from the Kremlin following Russia’s full-scale invasion of Ukraine in 2022 and concomitant Western sanctions targeting its supply chains. These events have brought Russia into closer alignment with Iran by accelerating its broader push to reshape international trade and economic relations, an effort centered on limiting the West’s role in defining and leading such relations.

This report represents one of the first in-depth examinations of the corridor within Western policy circles, combining an extensive review of regional scholarship and news reporting with expert interviews, web scraping, and original satellite imagery analysis. The study identifies a clear Russian and Iranian commitment to creating a trade route that could bypass Western sanctions and evaluates the corridor’s potential to reshape the U.S.-dominated global trade system in the coming decades. It is true that, given the substantial investments required to fully operationalize the corridor, as well as long-standing, and currently exacerbated, geopolitical uncertainties surrounding the region as a whole, multiple questions regarding the INSTC’s viability remain unresolved. However, if the current U.S. and Israeli conflict with Iran does not result in fundamental regime change, the strategic interests of the Russian and the Iranian governments in developing alternative trade routes that bypass the West are likely to remain largely unaltered.

This report is made possible by the generous support of the Smith Richardson Foundation.