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Iran, Kazakhstan boost trade relations with new railway network

Kazakhstan is a strong ally of Iran, and has helped the Islamic Republic circumvent sanctions.
Kazakhstan President Kassym-Jomart Tokayev is seen on a monitor during a video conference with European Council President Charles Michel at the European Council building, Brussels, Belgium, Jan. 10, 2022.

Iran and Kazakhstan are continuing to develop their economic ties. 

Kazakh President Kassym-Jomart Tokayev visited Tehran yesterday where he met with Supreme Leader Ayatollah Ali Khameini and President Ebrahim Raisi. During the visit, Raisi and Tokayev inaugurated a railway network running from Kazakhstan to Iran and onto Turkey. The purpose of the railway is to facilitate Kazakhstan’s exports to Europe, and a Kazakh freighter left Tehran for Turkey yesterday to this end, the official Islamic Republic News Agency reported. 

The state-owned National Iranian Oil Company and its Kazakh counterpart KazMunayGas also signed a cooperation agreement. Officials signed additional deals on cooperation related to science, transportation, cultural exchanges, trade and agriculture during the Raisi-Tokayev summit, according to the agency. 

Why it matters: Iran has had good relations with Kazakhstan since the Central Asian country gained independence from the Soviet Union. Kazakhstan has especially assisted Iran via oil swap agreements, which have helped the Islamic Republic circumvent sanctions, Giorgio Cafiero wrote for TRT World in January. 

Iranian officials did not criticize the Kazakh government during the unrest there in January, instead calling for calm

Iran has been eyeing increased trade with Kazakhstan recently. Kazakh Trade Minister Bakhyt Sultanov visited Tehran in February to discuss trade with Iranian Vice President Mohammad Reza Mokhber Dezfouli. In April, a Kazakh consular official endorsed Kazakh companies doing more business in Iran’s Bandar Abbas port. 

Iran’s exports to Kazakhstan have increased on average 5.07% each year since 1997, while Kazakh exports to Iran have increased 1.6% yearly in that time frame. The main Iranian exports to Kazakhstan are fruits and nuts. The main Kazakh exports to Iran are barley and wheat, according to the US-based Observatory of Economic Complexity. 

Know more: The railway network with Kazakhstan could help Iran promote the International North-South Transport Corridor trade route in Russia, Iran and India. The countries want the corridor to rival the Suez Canal in Egypt. Relatedly, Iran opened a trade center in Russia last week to boost the corridor. 

Iran’s trade with several Central Asian countries increased in 2021, including Turkmenistan.