Russian president Vladimir Putin and his Iranian counterpart Ebrahim Raisi held a virtual meeting today to sign an agreement to finance, design and build a rail-based transport corridor between the two countries.

The agreement specifically covers the missing link in the two countries’ networks, between the Iranian city of Rasht on the Caspian Sea and the Azerbaijani border city of Astara.

The North–South Transport Corridor is intended to form a continental crossroads with China’s east–west Belt and Road Initiative. It will improve trade and other links between Azerbaijan, India, Iran and Russia, which Russia says can rival the Suez Canal as a global communications conduit.

President Putin said a decision was taken last year to connect Russian ports on the Baltic with Iranian ports in the Gulf and Indian Ocean.

He added: “Today we are witnessing the beginning of the implementation of that idea that was probably formulated for the first time 20 years ago.

“A 162km railway line will be built between the cities of Rasht and Astara. It may look like a short stretch, but its construction will allow us to create direct and uninterrupted railway transportation along the entire length of the North–South route.

President Raisi responded that the agreement was “an important and strategic step in the direction of cooperation between Tehran and Moscow”.

The Reuters news agency comments that Russia and Iran have been pushed to strengthen ties by Western economic sanctions.