Prime Minister Narendra Modi with Azerbaijan's President Ilham Aliyev

External Affairs Minister S Jaishankar’s visit to Azerbaijan on 23 October comes at a sensitive moment for bilateral relations, as New Delhi seeks to repair ties strained by Baku’s support for Pakistan during Operation Sindoor in 2025.

The visit follows Prime Minister Narendra Modi’s meeting with Azerbaijani President Ilham Aliyev on the sidelines of the Shanghai Cooperation Organisation summit in Bishkek last month, signalling a mutual effort to prevent political disagreements from derailing broader cooperation.

The central challenge for India is to rebuild engagement with Azerbaijan without weakening its expanding strategic and defence partnership with Armenia. According to the Ministry of External Affairs, Jaishankar’s discussions will focus on reviewing bilateral ties and exploring areas of mutual interest, particularly trade, energy and regional cooperation.

Relations deteriorated after the Pahalgam terror attack and India’s subsequent military response under Operation Sindoor. Azerbaijan publicly criticised India’s actions and backed Pakistan, drawing concern in New Delhi at a time when India was seeking international support for its response to cross-border terrorism.

The dispute reflects broader geopolitical alignments in the region. While Azerbaijan maintains close political and defence ties with Pakistan and Turkey, India has steadily deepened defence cooperation with Armenia. In recent years, Yerevan has emerged as a major customer for Indian-made military equipment, including Pinaka multi-barrel rocket launchers, artillery systems and Akash air defence missiles.

For India, restoring relations with Azerbaijan does not imply any dilution of ties with Armenia. Instead, New Delhi is attempting to pursue a balanced regional approach in which engagement with one partner does not come at the expense of another.

Recent diplomatic efforts suggest both sides are keen to prevent tensions from becoming entrenched. India and Azerbaijan held their sixth round of Foreign Office Consultations in Baku in April 2026, the first such meeting since 2022. The talks, led by Sibi George and Azerbaijani Deputy Foreign Minister Elnur Mammadov, covered cooperation in trade, technology, tourism, pharmaceuticals, energy, culture and counterterrorism.

Counterterrorism remains an especially significant issue for India given its longstanding concerns over Pakistan-backed militancy. The consultations provided an opportunity to address contentious issues while maintaining dialogue on areas where interests converge.

India also maintained engagement through participation in the seventh summit of the Conference on Interaction and Confidence Building Measures in Asia (CICA) in Baku on 15 October, where the Indian delegation was led by Minister of State for External Affairs Kirti Vardhan Singh. These exchanges have restored diplomatic contact, although questions remain over whether they can translate into longer-term stability.

Economic interests continue to provide a strong incentive for both countries to maintain working relations. Bilateral trade reached approximately $401 million in 2025, with Indian exports accounting for $226 million and imports, largely crude oil, valued at $175 million. However, this represented a sharp decline from roughly $1.435 billion recorded in 2023, highlighting the volatility of trade flows driven by energy transactions.

India’s commercial stakes in Azerbaijan’s energy sector are substantial. ONGC Videsh has invested more than US$1.2 billion in the Azeri-Chirag-Gunashli oil and gas fields and the Baku-Tbilisi-Ceyhan pipeline.

In November 2024, the company increased its participation through the acquisition of an additional stake from Equinor, raising its holding in the oil field to 2.925 per cent and its interest in the pipeline to 3.097 per cent.

Beyond hydrocarbons, both governments have identified pharmaceuticals, information technology, tourism and agriculture as sectors with potential for future growth. Expanding cooperation in these areas could help diversify economic relations, although significant progress is yet to be demonstrated.

Azerbaijan’s position during Operation Sindoor highlighted the difficulty of separating economic engagement from strategic politics. Baku’s close partnership with Pakistan and Turkey contrasts sharply with India’s growing defence relationship with Armenia, creating competing regional dynamics that neither side can ignore.

Connectivity also adds to Azerbaijan’s strategic importance. Positioned between the South Caucasus, Turkey, Europe and Central Asia, the country plays a potentially valuable role in discussions surrounding regional trade and transport corridors. This geographical advantage reinforces the case for sustained engagement despite political differences.

Nevertheless, geography and commerce alone cannot bridge disagreements over Pakistan or Armenia. While India’s energy investments and economic interests create incentives for stable relations, they do not eliminate underlying strategic divergences.

Jaishankar’s visit should therefore be viewed as an effort to restore a practical working relationship rather than a sign that fundamental differences have been resolved.

The real measure of success will be whether India and Azerbaijan can maintain sustained cooperation while continuing their respective partnerships with Armenia and Pakistan, avoiding a situation where regional rivalries overwhelm shared economic and diplomatic interests.

Agencies