Amid ongoing attacks by Israel and the United States, Iran has launched a new transcontinental trade route to China, aligning with a key aspect of its foreign policy: positioning Iran as a central hub in the shifting and expanding Eurasian connectivity.
Traditionally, the Persian Gulf has been critical to Iranian trade. The more recent push to develop land routes to Central Asia aims to diversify commercial links and boost cooperation with a booming area of economic growth, The Caspian Post reports citing foreign media.
These land routes have become increasingly important as the region redefines itself as a major node in transcontinental trade, between Russia and Afghanistan, as well as between China and the European Union. Major powers have all established separate summit formats with the five Central Asian states and seek trade and investment opportunities with them. In the past, Central Asia was not at the epicenter of Iran’s foreign policy, yet this might be changing given the region’s growing economic and transit potential.
Tehran has made major moves to improve relations with Turkmenistan and Tajikistan and has expanded ties with Uzbekistan. In June, Iran and Turkmenistan signed a memorandum of understanding on enhancing shipping and logistics coordination. In May, the two countries agreed on a roadmap for comprehensive cooperation over the next two years, with a key point being to boost mutual work on transport and logistics.
In January, Iranian president Masoud Pezeshkian visited Tajikistan, reversing a negative trend in relations with the fellow Persian-speaking country that had prevailed since the 1990s. The two sides signed 22 memorandums of understanding covering infrastructure, trade, and other issues while dubbing improving ties “strategic.” A landlocked country, Tajikistan seeks better access to big markets and is therefore interested in Iran’s Chabahar and Bandar Abbas ports. Tajikistan is also reacting to India’s interest in connecting to Central Asia via Chabahar. An Iran-Tajikistan Business Forum held in Dushanbe in January produced 13 bilateral cooperation documents on infrastructure and trade, among other issues. In June, officials from both countries met again to discuss trade.
But Iran is looking beyond Central Asia to China. On May 12, a meeting was held in Tehran among senior railway officials from Iran, China, Kazakhstan, Uzbekistan, Turkmenistan, and Turkey to discuss the development of a transcontinental rail network. On May 25, a freight train from Xi’an, China, carrying a load of solar panels, arrived at the Aprin rail dry port, marking the official launch of a direct rail link between the two countries. From western China, the route crosses Kazakhstan and Turkmenistan en route to Iran.
Iran is capitalizing on Central Asia’s expanding links with China. For example, in late 2023, Kazakhstan unveiled the Ayagoz-Tacheng railway connection, its third rail border crossing with China. There is also the China-Kyrgyzstan-Uzbekistan railway, a long-stalled project, which lately has seen major progress on the Chinese side.
Iran is also focused on the eastern branch of the International North-South Transport Corridor (INSTC), which runs from Russian ports on the Caspian and Baltic Sea, as well as to the Persian Gulf and India. A western branch crosses Azerbaijan. The eastern branch would travel to Iran and Afghanistan, whose Taliban-controlled government was recently recognized by Moscow. Russia was the first country to do so since the Taliban retook control of Afghanistan after the U.S. withdrawal in 2021.
For Iran, routes to the north and northeast help reduce the impact of sanctions by diversifying trade ties. Iran has recently offered to buy Astrakhan port from Russia, which would expand trans-Caspian commerce.
A pivot to Asia would allow the Islamic Republic to reduce Western economic pressure as well as minimize the effect of a potential closure of the Strait of Hormuz, which Iran has threatened in the face of Israeli and U.S. attacks. Iran has historically exported oil to China - in many respects, an economic lifeline - via the Persian Gulf. A train link with China provides an alternative route for oil exports and overall trade with China. The new route reduces transit time from 30 to 40 days by sea to approximately 15 days by land; the Aprin dry port - an inland terminal linked by rail and road to actual sea ports - allows for greater connectivity with the rest of Iran.
For its part, China seeks to bypass the Malacca choke point, a water passage that links the Indian and Pacific Oceans. So far, the emphasis in China has been on a north Eurasian route that runs primarily through parts of Russia. Since February 2022, when Russia began its full-scale invasion of Ukraine, China has also utilized a Middle Corridor, which stretches from Xinjiang to the Black Sea via the Caspian and the South Caucasus. With better access to Iran, which joined China’s Belt and Road Initiative (BRI) in 2019, China aims to counter a series of Russian and Western connectivity initiatives, such as INSTC, or the India-Middle East-Europe Corridor (IMEC),which aims to link India with Europe via Saudi Arabia and Israel. China also seeks to counteract India’s efforts to build routes to Central Asia and Afghanistan via the Islamic Republic.
For China, the emerging China-Iran railway corridor via Central Asia falls within its broader push westward and constitutes part of the China-Kazakhstan-Uzbekistan-Turkmenistan-Iran-Turkey/EU corridor. China wants to diversify commercial links to avoid dependence on any single player. Beijing’s experience with how Western sanctions have made the route through Russia unstable as a result of the war in Ukraine has also served as a powerful lesson on the need to seek alternative corridors. Additionally, poor security on the ground in Pakistan, which has often compromised Chinese investments, makes it paramount for Beijing to find new routes.
