Armenia-Azerbaijan Trade Bypasses Russia at Record Pace

Trade between Armenia and Azerbaijan is expanding at an unprecedented rate, with both governments deliberately routing commercial flows through Georgian territory as part of a broader strategy to reduce Moscow's economic leverage over the South Caucasus, according to a new report by Radio Free Europe/Radio Liberty.

The bilateral commerce, which was virtually nonexistent during three decades of conflict, has accelerated sharply since the 2023 ceasefire framework. Georgian rail infrastructure has become the primary conduit, carrying energy products, grain, and an expanding list of industrial and agricultural goods between the two countries.

Azerbaijan is now serving as a transit corridor for wheat shipments from Kazakhstan and Russia destined for Armenian buyers, while Armenian officials are finalizing a list of industrial and agricultural products for export to Azerbaijan. The trade diversification marks a significant shift from the post-Soviet pattern in which Russia served as the primary commercial intermediary for both countries.

Armenian Prime Minister Nikol Pashinyan acknowledged Georgia's facilitating role in recent remarks, noting that Tbilisi's position as a neutral logistics hub has been essential to enabling the trade expansion. Georgia's railway system, which connects to both Armenian and Azerbaijani networks, provides the physical infrastructure that makes the bypass of Russian routes possible.

The economic implications extend beyond bilateral trade. Analysts at the International Monetary Fund have noted that a comprehensive peace agreement between Azerbaijan and Armenia could unlock significant new investment flows into the region, potentially opening direct transport corridors that would further reduce transit costs and times.

Armenia's foreign and mutual trade turnover increased by 9.3 percent in January-February 2026 compared to the same period in 2025, reaching over $3 billion, according to data from the Armenian statistical service. The growing trade relationship represents one of the most tangible peace dividends in the South Caucasus, even as formal negotiations on a comprehensive peace treaty continue.

Further Reading

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IMF Says Azerbaijan-Armenia Peace Could Unlock Regional Investment Wave