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Nazrin Abdul

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As Azerbaijan pursues economic diversification, reducing reliance on oil revenues has emerged as a strategic imperative. Over the past decade, the government has prioritized the development of non-oil sectors, particularly manufacturing, agriculture, and high-tech industries. At the heart of this transformation are industrial parks, which have become the cornerstone of the country’s new economic model. By combining modern infrastructure, targeted investment incentives, and policy support, these zones are not only attracting domestic and foreign investors but also reshaping the geography of economic activity.

The most striking achievements have been recorded in the liberated territories. The Agdam Industrial Park has quickly become a regional economic hub, registering 32 residents and 5 non-residents, attracting 145.8 million manats in investment, and creating 1,000 permanent jobs. With 13 enterprises already operational, the park has generated 1.4 billion manats in product sales, including 62.3 million manats in exports.

Similarly, the Araz Valley Economic Zone in Jabrayil has drawn 19 residents and 3 non-residents, with 43.8 million manats invested and around 100 jobs created. These developments underscore the government’s strategy of linking economic revival directly to regional reconstruction, ensuring that local populations benefit from new opportunities.

Beyond the liberated territories, industrial activity continues to expand in established hubs such as Mingachevir, Garadagh, Pirallahi, Hajigabul, Neftchala, Sabirabad, and Masalli. New infrastructure projects in Nakhchivan and the Western Industrial Park, launched in 2024 and 2026 respectively, signal the government’s intent to balance industrial potential across all regions.

By the end of 2025, industrial zones managed by the Economic Zones Development Agency had registered 138 residents and 13 non-residents, with 7 billion manats in actual investments and more than 9,700 permanent jobs created.

Between 2015 and 2025, industrial zones generated 19 billion manats in product sales, of which 6 billion manats were exported. In 2025 alone, exports reached 1.2 billion manats, marking a 13.4% increase compared to the previous year. Products from these zones are now exported to over 70 countries, reflecting Azerbaijan’s growing integration into global supply chains.

Most importantly, industrial zones accounted for 19.1% of non-oil industrial production and 33.9% of non-oil exports in 2025. These figures demonstrate their central role in Azerbaijan’s long-term strategy to diversify away from oil dependence.

Rising foreign investment and policy support

Foreign investment has grown significantly, rising from 10.4 million manats in 2016 to 87.9 million manats in 2025. This sharp increase signals rising confidence among international investors in Azerbaijan’s industrial infrastructure.

Government support remains a decisive factor. Tax and customs exemptions saved residents 42 million manats in 2025, with cumulative savings exceeding 547 million manats. President Ilham Aliyev’s active involvement, such as inaugurating enterprises in the Sumgayit Industrial Park, the largest in the South Caucasus, reinforces the perception of industrial zones as a priority area of national economic policy.

The rapid growth of Azerbaijan’s industrial zones reflects a dual strategy: regional development, where industrial parks in liberated territories rebuild war-affected regions while tying economic revival to local employment and entrepreneurship, and diversification of exports, with nearly one-third of non-oil exports originating from these zones, making them the backbone of Azerbaijan’s diversification agenda.

Yet sustaining this momentum will require addressing challenges such as consistent infrastructure development, attracting higher levels of foreign direct investment, and fostering innovation-driven enterprises rather than relying solely on traditional manufacturing. Industrial zones in Azerbaijan have moved beyond being policy experiments and are now strategic centers of economic transformation; with rising exports, growing foreign investment, and strong government backing, they are poised to become the cornerstone of Azerbaijan’s non-oil economy and a model for regional industrialization in the South Caucasus.