Iran and Russia signed on Wednesday a contract to build a railway inside Iran to complete an international transport route linking South Asia to Northern Europe, the Iranian president's office said.

The 162 km railway between the northern Iranian cities of Rasht and Astara will be built as part of the international North-South Transport Corridor (INSTC), according to a report published on the website of the Iranian president's office.

Iranian President Ebrahim Raisi and his Russian counterpart Vladimir Putin attended the signing ceremony of the contract through a video conference, the report said.

According to the contract, Russia will invest 1.6 billion euros (1.73 billion U.S. dollars) in the construction of the strategic railway which is expected to be completed in 48 months, it added.

During the ceremony, Raisi said Iran plans to expand cooperation with Eurasian Economic Union (EAEU) member states, noting the elimination of the bilateral trade tariffs can be a huge step toward the enhancement of cooperation among Iran, Russia and the EAEU members.

Describing INSTC as a "tangible" share in ensuring food security in Iran and regional Arab countries, Putin expressed hope that the completion of the corridor would lead to greater exchange of food and other products among the Caspian Sea littoral states and regional Arab countries.

Iran and Russia, both being under the sanctions imposed by the United States, have recently expanded bilateral political and economic relations to counter the U.S. moves.

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