Iran and Russia agreed on Wednesday to collaborate on the construction of the final part of a commercial transport network linking to the Gulf and India while avoiding Western sea lanes.

Iranian Transport Minister Mehrdad Bazrpash, who signed the agreement with his Russian counterpart in Tehran, said the 164-kilometre railway in Iran’s north would be completed within three years.

It is the only missing link in the International North-South Transport Corridor (INSTC) from northeast Russia via Azerbaijan to Iran’s southern coastline and on to India by sea.

Russia and Iran are both under international sanctions that restrict trade.

The freight network of ship, rail and road routes, which covers some 7,200 kilometres, avoids the Suez Canal between the Mediterranean and the Red Sea which would otherwise transport some Russian seaborne cargo.

Iranian President Ebrahim Raisi, who attended the signing ceremony, and Russia’s Vladimir Putin, who spoke there via videoconference, both hailed the economic opportunities the agreement presents.

The planned railroad would connect Rasht, a city in northern Iran, and the Astara crossing on the border with Azerbaijan.