Russia builds sanctions-proof trade routes with INSTC corridor, BRICS digital payments

Russia is systematically constructing alternative economic infrastructure to counter Western sanctions, pursuing parallel strategies in logistics and digital finance that redirect trade toward Asia and the Middle East. The International North-South Transport Corridor, a 7,200-kilometer multimodal network connecting Russia to India via Iran, has emerged as Moscow's primary trade alternative to traditional maritime routes disrupted by geopolitical tensions .

INSTC Progress and Infrastructure Development

The corridor reduces shipping distance by approximately 40% and cuts transit time from 45 days to under 25 days compared to the Suez Canal route, with container shipping costs projected to decrease by 30% . Last year, an estimated 30 million tons of cargo transited the INSTC, with officials targeting 45 million tons annually by 2030 . Iran is working with Russian financing to complete missing railway links, including the 162-kilometer Rasht-Astara line. Russian Energy Minister Sergey Tsivilev announced Wednesday that the agreement to commence this railway project would be signed April 1 . The corridor's strategic importance has grown as traditional Baltic, Black Sea, and Mediterranean routes face disruption.

BRICS Bridge: Digital Finance Alternative

Simultaneously, Russia is developing the BRICS Bridge, a blockchain-based payment system connecting central bank digital currencies of BRICS members including Brazil, China, Egypt, Ethiopia, India, Indonesia, Iran, Russia, South Africa, and the United Arab Emirates . The platform has reached an advanced pilot stage, with controlled transactions occurring between Russia, China, the UAE, and Iran. The system eliminates correspondent banking through peer-to-peer transfers via central bank digital wallets, potentially reducing transaction costs by up to 40% .

Challenges and Limitations

Despite ambitious goals, both initiatives face significant obstacles. Infrastructure deficits in Iran, including delayed railway construction, require shipments to use transshipment methods. On the financial front, BRICS Bridge expansion is slowed by member countries' concerns about US secondary sanctions . Trading in national currencies has also created liquidity imbalances—Russia accumulated unusable Indian rupees from oil sales due to insufficient reciprocal imports . Experts emphasize that transit partners must rapidly digitize and modernize customs bureaucracies for these systems to function effectively, highlighting the gap between ambition and operational reality.