Can the Middle Corridor be Europe's Middle Ground?

The Middle Corridor, officially known as the Trans-Caspian International Trade Route, is often touted as the shortest trade route connecting China to Europe – an alternative to both Russia’s Northern Corridor and the Suez Canal. On paper, it is a game-changer. And if you follow regional news, you will see a near-weekly stream of announcements celebrating milestones along the route. Just in the past few weeks, Kazakhstan pledged to boost cargo shipments to 10 million tons, Maersk- a Danish shipping company- completed its first trial shipment from Japan to Europe via Middle Corridor, and Bulgaria announced a $1.8 billion investment in the Middle Corridor railway network- the list goes on.

As these developments accelerate, the potential of the Middle Corridor is becoming increasingly apparent, calling for a closer analysis of how Europe should engage. In today’s complex geopolitical climate, it is in Europe’s interest to diversify its trade routes to strengthen its global connectivity. But doing so requires more than just strategic ambition – it demands a nuanced understanding of the practical realities and security risks along the trade routes. To play a meaningful role, Europe must engage with trade routes not just as an observer but as a committed partner, fostering cooperation and supporting their development, when and where the potential is obvious.

Middle Corridor - Promises and Hurdles

The Middle Corridor has gained even more significance – as a politically appealing alternative for trade – since Russia’s full-scale invasion of Ukraine. Only in the first 11 months of 2024, the cargo volume reached 4.1 million tons, a 63% year-over-year increase, and a stark change from the 586,000 tons recorded in 2021. But complexity lurks beneath these promising statistics.

The Middle Corridor isn’t a single, seamless transportation route. It is a complex network of roads, railways, and sea connections spanning multiple countries, each with its own logistical and bureaucratic challenges. Bottlenecks remain, from geographical constraints – harsh winters and strong winds in the Caspian delaying ferries – to bureaucratic hurdles like harmonising customs procedures, training personnel, and practical issue of railway gauge mismatches, or tax system misalignment between European and Soviet-era systems. Infrastructure investment is another pressing challenge, with estimates pointing to an €18.5 billion funding gap for much-needed modernisation.

If these hurdles are overcome, the route could offer significant benefits – not just for European interests, but also for the South Caucasus, Central Asia, and China. And its success would do more than just shift trade routes; it would strengthen regional connectivity, boost interregional commerce, and demonstrate that Central Asia and the South Caucasus are more than transit zones but strong partners that Europe should engage meaningfully when it comes to trade. However, managing expectations on the ground and addressing concerns will be just as crucial as physical investments.

If neglected, this Middle Corridor could see the route fall victim to the same geopolitics that Europe seeks to avoid, allowing China, Russia and other regional actors to fill the void and impede, not facilitate, European supply chains in the future. It is important, therefore, for Europe to balance both its priorities and local views, as well as consider ways to secure the route against future disruptions.

Future-Proofing Supply Chains Along the Middle Corridor

To Europe, a main benefit of the Middle Corridor in the past three years has been an additional trade route that avoids transiting Russia, where many goods are sanctioned. It is therefore in Europe’s interest to ensure that Russia is not able to co-opt this route for its own purpose.

RUSI’s Centre for Finance and Security (CFS) has recently conducted in-person interviews on the ground to better understand the practical realities of trade along the Middle Corridor. Interviewees along the Middle Corridor told us that many of the goods they shipped along the route were those that could not be transported via Russia because they were subject to sanctions, such as those on the G7 Common High Priority Items List. This was, they said, both because local authorities were increasingly vigilant about preventing the transfer of such goods to Russia, but also because Russia regularly confiscates goods that it deems useful or goods travelling to and from Europe.

Any European engagement to promote trade along the Middle Corridor should keep in mind future risks that this route may also be used to divert critical technologies. This needn’t mean abandoning trade with the region altogether. Instead, European policymakers could consider three key factors to ensure that trade promotion is accompanied by programmes that address risks of circumvention–both now and in the long term.

First, sanctioned goods shipped to Russia often transit or trans-ship through several jurisdictions to avoid detection. As transparency initiatives and trade data become publicly or commercially available, circumvention networks move to new, less visible jurisdictions. Even where trade data is available, multiple transshipments mean there are multiple points of potential evasion – where goods disappear or are smuggled without formal reporting. The inherent multijurisdictional nature of the Middle Corridor may provide many such opportunities for diversion. To combat this, European institutions should continue work with regional and international initiatives such as the Digital Trade Corridor to digitise and automate customs declarations and other trade procedures, ensuring transparent and visible movement of goods. This could have the added benefit of helping to combat corruption in the customs sector, and therefore of curbing organised crime and other illicit trade activity that relies on border corruption.

Second, small and medium enterprises (SMEs) are vulnerable to being co-opted for diversion purposes. In the past three years, networks seeking to circumvent sanctions on Russia relied on companies set up by Russian individuals, but field interviews indicated that as these networks were detected, Russian networks approached local companies to act as intermediaries. This took various forms, some involving more direct involvement than others. In some cases, contacts said, an SME may be asked simply to act as a transshipment route on paper and receive a small commission for this. At the other end of the scale, SMEs may hold goods on their premises (for example a farm or warehouse) until it can be smuggled over a border. European engagement should be accompanied with programmes to ensure regional SMEs’ links to Europe are strengthened and therefore reducing the incentive for SMEs to be coopted in circumvention. In addition, European programmes can work to train SMEs and increase their capacity in sanctions awareness and integrity.

A third important source of diversion is Russian influence in local high-tech industries, which is likely to grow. Local high-tech companies can plausibly import sanctioned technologies, and then divert them to investors or partners in Russia. The countries along the Middle Corridor route have defence technology industries of their own (albeit some more advanced than others), and these technologies are set to grow rapidly. Further, the industries in which high-tech components are used extends beyond defence, spanning industrial parks, special economic zones, renewable energy companies, logistical centres, and AI development or crypto mining ventures. European countries can support local states to instil greater transparency in their foreign investment approval process, which would have additional anti-corruption benefits.

Engagement Should Balance European and Local Views

European views on the Middle Corridor have been somewhat ambiguous. On one hand, they see an opportunity for influence and engagement; on the other, concerns linger over the potential for sanctions evasion along the route. Since 2022, much of the diplomatic attention on Central Asia and the Caucasus has focused on sanctions evasion and circumvention – an important intervention, given early indications that critical sanctioned technology was being trans-shipped through the region. But diplomacy needs both carrots and sticks, and supporting infrastructure development can be a way of demonstrating European commitment to building up long-term trade relationships that foster cooperation in other areas, such as sanctions implementation.

In-country field interviews revealed that local partners remain keen to expand trade with Europe but see clear gaps in European action. Future engagement must take these concerns seriously, as many of the practical challenges raised on the ground are rooted in political and geopolitical realities – requiring policy solutions, not just rhetoric.

On-the-ground interviews by the authors identified issues that deserve attention by European stakeholders. First, the main direction of trade is overwhelmingly east-to-west. This is because there is a lack of European exports (at least not in similar volumes), which means trucks and railcars may be forced to return from Europe empty, effectively doubling transport costs. Given that the Middle Corridor is already more expensive than competing routes, this absence of return cargo poses a significant challenge to its long-term cost-effectiveness.

Second, nearly every logistics company interviewed pointed to the difficulty of securing permits for trucks and visas for drivers. With Europe tightening migration policies, very few drivers can obtain the necessary permissions, forcing companies to turn down work due to a shortage of authorised personnel.

Third, investment remains a critical issue. Modernising and aligning infrastructure across the route requires substantial funding. While European investment is welcomed, local actors stress that financing would need to come at below-market interest rates, given that the Middle Corridor is already costlier than alternative routes. Local stakeholders also told us they prefer a multilateral investment structure, to avoid perceptions that the route is dominated by one geopolitical superpower.

Europe Should Consider what Diversified Trade Routes are Worth

As we write, there is widespread speculation on the future of sanctions on Russia, as well as on future geopolitical contests. Amidst this uncertainty, European engagement to develop the Middle Corridor remains not only relevant but necessary. One of the important lessons for Europe from Russia’s invasion of Ukraine has been about the need to diversify trade routes.

To do this, Europe must present itself as a reliable partner both in terms of trade and in other areas of cooperation such as infrastructure investment. Local countries in Central Asia and the Caucasus have demonstrated their commitment to this route, investing their own funds in developing parts of the Middle Corridor. Where Middle Corridor expansion is funded by other countries – Russia and China, for example – they will see benefits. Europe has many geopolitical and investment factors to consider when assessing the benefit of this route. It should decide what trade diversification and development in the region is really worth.

© RUSI, 2025.

The views expressed in this Commentary are the authors’, and do not represent those of RUSI or any other institution.

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