The North–South corridor now carries Iran’s trade, not India’s

The International North–South Transport Corridor has had its best year in freight terms at the moment its founding purpose became hardest to serve. The corridor was conceived as a 7,200-kilometre route from Russia through Iran to India, a shorter alternative to the Suez Canal. Since the war that began with US and Israeli strikes on Iran on 28 February, the Gulf end of that route has been largely shut. What has grown instead is trade between Russia and Iran themselves, moving over the Caspian Sea and through Azerbaijan. The corridor is working, but as a supply line into northern Iran, not as a transit route to the Indian Ocean. That distinction should shape how its numbers, and its unfinished railway, are read.

What the operators reported

Russian Railways carried 7.8 million tonnes on the corridor’s rail routes in January–August 2026, 7 per cent more than in the same period of 2025. August was stronger: 1.1 million tonnes, up 33.3 per cent year on year. The figures cover rail only and are not broken down by branch, so they do not show how much went down the western route through Azerbaijan and how much down the eastern route through Kazakhstan and Turkmenistan.

On the western branch, Azerbaijan Railways’ transshipment terminal at Astara, on the Iranian side of the border, handled 346,690 tonnes in January–May, against 274,618 tonnes a year earlier, a rise of 26 per cent. The operator says the terminal will be able to handle 3.5–4 million tonnes a year once completed, so current throughput is a fraction of the design.

The sharpest change was on the water. Reuters reported in April that Russia shipped 500,000 tonnes of feed corn, 180,000 tonnes of feed barley and over 4,000 tonnes of food-grade wheat to Iran from its Caspian ports in the first quarter, and about 300,000 tonnes of grain in March alone. Exports from the Astrakhan region rose 61 per cent to 730,000 tonnes in the quarter. Wheat had not left Russia’s Caspian ports for export in more than eight years, according to Alexander Sharov of the RusIranExpo consultancy, because the whole flow had gone through Novorossiysk on the Black Sea. Iran was the third-largest buyer of Russian wheat this season.

Why the headline numbers disagree

Russia’s foreign ministry spokeswoman, Maria Zakharova, said in June that corridor freight rose 87 per cent in the first four months of 2026, and that traffic reached about 21.5 million tonnes in 2025, as reported by the Russian outlet Realist. That is far above the 7 per cent that Russian Railways reports for eight months. The two are not measuring the same thing. The ministry’s figure appears to cover all modes, including Caspian shipping and road haulage, over a period that includes the first weeks of the war, when cargo shifted fastest from Gulf ports to northern routes. The railway figure covers rail alone over a longer period. Neither source publishes the breakdown needed to reconcile them, and the larger number should not be quoted without that caveat.

Both series point the same way, however. The growth is concentrated in goods moving between Russia and Iran, above all grain, and in the months after February. That is trade diversion. Cargo that used to reach Iran through Bandar Abbas and other southern ports, or that Russia used to ship from the Black Sea, is now entering from the north because the south is too risky or too expensive to use.

The southern end is closed

The corridor’s original business case needs the Gulf. Indian cargo was meant to arrive by sea at Bandar Abbas or at Chabahar, cross Iran by land and continue north. Neither port currently offers that. The National reported on 10 September that only nine vessels crossed the Strait of Hormuz on one day and two the next, against more than 100 a day before the war, and that 514 commercial ships were stranded in the Gulf. It cited International Maritime Organization figures of 73 attacks on vessels and 21 seafarer deaths since the conflict began. According to ACLED, US forces struck ten tankers in the first ten days of September; Iran’s Revolutionary Guard said it had inflicted extensive damage on US vessels, without giving details.

Chabahar, the Indian-operated terminal on the Gulf of Oman, has its own problem. The US sanctions waiver that covered India’s involvement expired on 26 April and, according to Al Jazeera, Washington gave no sign of renewing it. India had invested at least $120 million in the Shahid Beheshti terminal and made a further payment of $120 million in February; its 2026 budget contained no allocation for the port for the first time in nearly a decade. India’s foreign ministry spokesman, Randhir Jaiswal, called the conflict “a complicating factor” and said New Delhi was in discussion with both Tehran and Washington.

With both southern gateways constrained, very little of what now moves on the corridor is Indian transit. None of the operators’ 2026 releases reviewed here claims otherwise.

What the missing railway is for

The 162-kilometre Rasht–Astara line is the last gap in the western branch. Without it, freight reaching Astara by rail has to be transshipped for the onward journey into Iran, which is what the Azerbaijani-run terminal does. Russia and Iran signed the documents to complete it in May 2023, with Russia financing the work through a credit line. An executive contract was due to be signed on 1 April 2026; Xinhua reported on 20 April that it had been put off because of the war, quoting Iran’s ambassador in Moscow, Kazem Jalali, as saying that the “temporary constraints” of the situation showed the need for better logistics routes. By late June Ms Zakharova said engineering surveys had resumed and that the credit line “was not frozen”.

The railway would help the trade that is growing now, but it is not what that trade depends on. Grain is moving by ship from Russia’s Caspian ports to Iran’s, and by rail to a terminal that is still well below capacity. The line matters most for high-volume transit between the Baltic and the Indian Ocean, and that business needs an open Hormuz or a usable Chabahar. Until one of those exists, Rasht–Astara is an investment in the corridor’s future role rather than its present one.

What it means for Armenia and Azerbaijan

The war has also shown how exposed the South Caucasus is to Iran’s southern crossings. Armenia’s only land border with Iran, at Agarak, normally carries 400–450 trucks a day, and Iran–Armenia trade was worth about $770 million in 2025, RFE/RL’s Armenian service reported. In the first week of the war Iran closed the crossing to individual travellers twice, citing technical failures in its control system, and lines of trucks formed on the Iranian side. For Armenia, Iran is also a transit route to China and the Gulf states, so the closure of Hormuz affects its trade whichever way the goods travel. For Azerbaijan, the rise at Astara brings transit revenue, but it ties part of that income to a partner at war.

What to watch

Three indicators will show whether the corridor is becoming more than a wartime bypass. The first is the Rasht–Astara executive contract: whether it is signed, and on what financing terms. The second is the mix of cargo. If Russian and Iranian releases start to report containers bound for or arriving from India, the transit case is reviving; if they keep reporting grain and bulk, it is not. The third is Hormuz. A durable reopening would pull some Russia–Iran trade back to southern ports and would test whether this year’s northern volumes stick. Policymakers and lenders assessing the corridor should ask for figures by branch and by mode, and should treat headline growth rates as a measure of the war’s effect until that breakdown is published.

Sources

• SeaNews (Russian Railways data) — Rail freight via North-South International Transport Corridor, 8 months 2026
• Reuters via Baird Maritime — Russian wheat exports through Caspian Sea resume after long hiatus with Iran-bound shipment
• Report.az — Azerbaijan Railways: cargo handling at Astara terminal up 26%
• Xinhua — Iran-Russia rail project delayed by Mideast tensions
• Realist — Russian MFA: Iran’s interest in North-South Corridor grows amid instability in Strait of Hormuz
• The National — Bab Al Mandeb and Hormuz ship transits plunge as war intensifies
• Al Jazeera — Is India’s Chabahar dream in Iran dead?
• Azatutyun (RFE/RL Armenian Service) — Iran’s border with Armenia closed for ‘technical’ reasons