As Armenia pushes to position itself on trade routes linking Asia and Europe, it faces a major obstacle at home: Its rail network is still controlled by a Russian state company under Western sanctions.
Aiming to become part of international transit corridors, Armenia is constrained by the fact that its railways are managed by Russian Railways (RZD), under a 30-year concession signed in 2008.
“Due to Russia’s management of the railway, we are losing our strategic position and our competitive advantage,” Armenian Prime Minister Nikol Pashinian said in February.
He argued that Russian control discourages Turkey and Azerbaijan from using a much larger section of Armenian territory for transit in the near future. Pashinian also suggested that Russia could sell its concession to countries considered friendly by both sides, such as Kazakhstan, the United Arab Emirates, or Qatar.
New Push For Regional Transport Solutions
Russia has dismissed Pashinian’s calls to terminate Russian management of Armenia’s railway network as “bizarre.”
The issue has taken on new urgency as regional transport projects gain momentum.
Armenia has already agreed to a 43-kilometer route aimed at carrying Asian goods to Europe -- TRIPP, or the Trump Route for International Peace and Prosperity. Under the project, cargo from Central Asia would enter Azerbaijan, pass through Armenian territory to Azerbaijan’s Nakhchivan exclave, and then continue into Turkey.
However, for the route to extend northward through Turkey toward the Black Sea, a new railway would still need to be built.
The Armenian government has proposed an existing alternative: a parallel route running from Nakhchivan to Yerevan, then to Gyumri and Kars in Turkey. But that line, too, is under Russian management.
Russian Railways Struggling With Debt
If Russia’s involvement ends, Armenian territory could become more viable for trade between Asia and Europe, analysts say.
“Azerbaijani or Central Asian cargo destined for Turkey and Europe, which will enter Nakhchivan, from Nakhchivan should re-enter Armenia and reach Turkey via Yerevan-Gyumri-Kars railway,” Benjamin Poghosian, a senior research fellow at the Applied Policy Research Institute in Yerevan, told RFE/RL.
“This will also create economic interdependence between Armenia and Azerbaijan. And economic interdependence will decrease the chances of further conflicts,” Poghosian added.
SEE ALSO:
Wider Europe Briefing: The EU's First-Ever Armenia Summit
But removing Russia from the equation is not straightforward.
Earlier, Pashinian said he had asked Moscow to urgently address the full restoration of railway infrastructure, particularly the Yeraskh–Nakhijevan border section and the Akhuryk–Turkey border section.
At the same time, Russian Railways is burdened by debt estimated at around $51 billion -- exacerbated by high interest rates imposed by Russia’s central bank as it seeks to curb inflation.
Russia Pushes Back
Moscow has also shown little willingness to relinquish control.
On April 1, Russian Foreign Ministry spokeswoman Maria Zakharova said Russia was not engaged in talks with either Astana or Yerevan on transferring the concession to Kazakhstan.
During a recent meeting with Pashinian in Moscow, Russian President Vladimir Putin also pointed to Armenia’s growing ties with the European Union, while reminding Yerevan of its commitments within the Russian-led Eurasian Economic Union (EAEU).
SEE ALSO:
Bypassing The Kremlin: Armenia And Azerbaijan Expand Trade, Testing Russia's Grip“However, it should be obvious, it should be said honestly and beforehand, from the very beginning, that being in a customs union with the European Union and being in the EAEU is impossible. It is simply impossible,” Putin said.
Russian Deputy Prime Minister Aleksei Overchuk also raised concerns about Armenian companies operating in Russia.
With Russia’s focus diverted by the war in Ukraine, its influence in the South Caucasus is visibly receding. Analysts argue that the resolution of the Karabakh conflict has stripped Moscow of its primary regional leverage, allowing Armenia and Azerbaijan to bypass traditional Kremlin-led mediation.
However, Moscow still accounted for 35.5 percent of Armenia's foreign trade last year, according to Armenian government statistics, followed by China (12.5 percent) and the European Union (11.8 percent).
Meanwhile, regional players are moving ahead with alternative routes. Turkey and Azerbaijan are planning a 224-kilometer double-track railway linking Kars with Dilucu, on the Turkish border with Nakhchivan. The project, estimated at $2.8 billion, is expected to begin construction later in 2026 and be completed by 2030.
“Using the existing route in Armenian territory -- Yerevan-Gyumri-Kars route -- is more viable and cost-effective than the Kars-Dilucu line,” Richard Giragosian, the founding director of the Regional Studies Center, a think tank in Yerevan, told RFE/RL.
From Baku’s perspective , however, relying solely on the Armenian route is problematic, as it would require trains to cross back into Armenian territory a second time, complicating customs and border procedures, according to a recent Carnegie article.
“The second point is the formation of new routes along the Middle Corridor alongside the Baku-Tbilisi-Kars railway,” Farhad Mammadov, head of the Center for Studies of the South Caucasus, a think tank close to the government in Baku, told RFE/RL.
“The more routes there are, the more diversification is achieved. At the same time, this will provide security guarantees for the transport of international cargo,” he added.
For now, Armenia is left trying to balance ambition with constraints.
“It’s a pretty complicated issue,” Armenian Deputy Prime Minister Mher Grigorian told RFE/RL’s Armenian Service.
“I think Russia will eventually give in," analyst Giragosian told RFE/RL.