Armenia Proposes Iran-Black Sea Corridor for Indian Traders

Armenia has proposed a Persian Gulf-Black Sea corridor to connect Indian traders with Russia and Europe.

The offer was made last week by a visiting Armenian team comprising senior officials and experts. It came at a time when Armenia's foreign minister Ararat Mirzoyan was also visiting India.

The proposed corridor-which will run parallel to the International North-South Transport Corridor (INSTC)-will aim to connect Mumbai with Bandar Abbas in Iran and then Armenia and onward to Europe or Russia, bypassing Azerbaijan with whom India has lukewarm ties amid its close association with Turkey and Pakistan.

Armenia, whose ties with India have witnessed an upswing in recent years buoyed by defence exports from here, has sought Indian investments for the corridor in the Armenian territory, sources in the Armenian government.

Since the beginning of the Russia-Ukraine war, India's trade with Russia has increased manifold via the INSTC that connects Mumbai with Russia via Iran and the Caspian Sea. Azerbaijan is a key element under INSTC but has been slow in completing an infrastructure link under INSTC. Historically, Armenia shares strong political and business ties with Iran.

"As the new cold war disrupts Russia-West economic and political relations, any large-scale transit of cargo passing the Russia-Europe border looks too risky for the international logistic and insurance companies," Benyamin Poghosyan, founder and chairman of Yerevan, Armenia-based Center for Political and Economic Strategic Studies and senior research fellow at APRI-Armenia.

"At the same time, India's need for additional trade routes to reach Europe circumventing the Suez Canal remain valid. In parallel to the discussions around INSTC, Iran in 2016 put forward a new international transport corridor project, Persian Gulf-Black Sea, which should connect Iran with Europe via the South Caucasus. The negotiations were paused during the Covid pandemic, but all potential participants of the project-Iran, Armenia, Georgia, Azerbaijan, Bulgaria and Greece-expressed their interest in participating."

The Persian Gulf-Black Sea corridor fits well into India's plans as it looks for additional routes to reach Europe, circumventing the Suez Canal and avoiding the negative impact of Russia-West confrontation. The corridor itself may connect Iran with Georgia via either Armenia or Azerbaijan. Armenia and Azerbaijan have railway and highway connections with Georgia, and Azerbaijan has a railroad up to the Azerbaijan-Iran border.

There is a missing link of some 165 km inside Iran (the Rasht-Astara line) to connect Azerbaijani and Iranian railways. In January 2023, Russia and Iran agreed to launch the construction with Russian funding. Azerbaijan also has a highway connection with Iran, Poghosyan explained.

Given the extensive experience of Indian companies in taking part in large-scale infrastructure projects abroad and India’s interest in launching the India-Europe transport corridor route via Iran and Georgia, Armenia plans to start negotiations with India to discuss the involvement of Indian funding and Indian companies into the project. Armenia has witnessed strong economic growth in the region notwithstanding the war in the region.