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Akbar Novruz

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Russia’s invasion of Ukraine has reordered the commercial geography of Europe, and some of the less remarked effects include the emergence of Azerbaijan, traditionally a minor player in European trade, as a potentially important actor for an increasingly large number of European Union member states. None has welcomed this turn of events as warmly as Latvia. Trade between Riga and Baku has increased by over 130% since 2022, driven by logistics, a shared enthusiasm for green technologies, and Azerbaijan’s own modernisation push, which has given Westerners something to sell.

When Latvia's State Secretary of Economy, Raivis Bremšmits, sat down to assess his country's commercial ties with Azerbaijan on Wednesday with local media, the numbers on the page told a story of quiet but accelerating momentum.

Total trade turnover between Latvia and Azerbaijan reached €47mn in 2024, a rise of 10.2% on the previous year. That figure may appear small for two sovereign nations, but it represents the culmination of a three-year run of consistent expansion. In 2022, the bilateral trade relationship sat at roughly €20m, a figure that had itself only recently recovered from the disruptions of the Covid-19 pandemic. By 2023, that total had climbed to approximately €43mn, driven in large part by a near-doubling of Latvian imports from Azerbaijan. Latvia's Central Statistical Bureau recorded that imports from Azerbaijan rose by 90.7% in 2023 compared to the prior year, an exceptional spike against a backdrop in which Latvia's overall trade turnover fell by 11.9% that year, weighed down by lower energy prices and reduced volumes with Russia and Belarus.

Latvia's principal exports to Azerbaijan are foodstuffs, pharmaceuticals and electrical equipment; Azerbaijani exports to Latvia have historically consisted of base metals and plastic products. Neither basket is glamorous. But officials in Riga view that narrowness as an opportunity rather than a ceiling. "These sectors create opportunities for business cooperation, knowledge exchange and the implementation of mutually beneficial projects," Mr Bremšmits said, pointing to transport and logistics, agriculture and food production, and education as areas ripe for deeper engagement.

The 2025 figures suggest the relationship is entering a new phase. In the first half of 2025, trade turnover between the two countries reached €28mn, an increase of 43% compared with the same period of the previous year, with Latvian exports reaching €21mn and imports from Azerbaijan hitting €7mn, both also up 43%.

Investment flows tell a similar story. Azerbaijan ranked 40th among foreign investors in Latvia in 2024, with investment volumes of €15mn, a figure that climbed a further 7% to €16mn in the first half of 2025 alone.

For a country of Azerbaijan's size and geographic distance from the Baltic, that placement speaks to an appetite for positioning assets within the European Union's single market.

Azerbaijan has been actively seeking European partners since 2022, as the West's need for alternatives to Russian energy sources has elevated Azerbaijan from a secondary energy source to a primary one. The broader effort to modernize the economy, including the energy sector, agriculture, logistics, and digitalisation, has provided Azerbaijan both the means and the impetus to build trade relations. Latvia has been seeking to redirect its trade routes eastward within the space of the post-Soviet states without passing through Russia.

It is precisely in logistics where analysts see the most tangible near-term opportunity. The 'famous' Middle Corridor, the trans-Caspian trade route linking Central Asia and the Caucasus to Europe via Azerbaijan and the Black Sea, has gained significant traction since 2022. Riga's port and rail network, connecting to Central Europe and Scandinavia, could form a natural northern terminus for goods moving westward through that corridor. Mr Bremšmits acknowledged that transport and logistics represented a core area of potential cooperation, and Latvian officials have been exploring how to align infrastructure investment with Azerbaijan's own connectivity ambitions.

The environmental dimension adds a further layer of strategic alignment. Latvia is a committed adherent of the EU's Green Deal architecture and has developed competencies in waste management, water resource management and the bioeconomy that Baku is increasingly looking to import, figuratively and, potentially, literally. Azerbaijan's economic modernisation focus on energy, agriculture, logistics and digitalisation creates tangible opportunities for Latvian companies to expand positions in the region and participate in the country's economic modernisation projects, according to Mr Bremšmits, who added that Latvia sees good potential for cooperation in energy efficiency, renewable energy and sustainable industrial development.

The relationship is not without its asymmetries and constraints. Azerbaijan remains a minor trading partner for Latvia by European standards, ranking 59th among Latvia's foreign trade partners in 2024, well outside the top tier dominated by Lithuania, Germany and Estonia. The diplomatic relationship, while cordial, lacks the institutional density of Latvia's ties with its EU and NATO partners. And Baku's domestic reform trajectory, while impressive in macroeconomic terms, raises governance questions that some Western European investors factor into their calculations.

The convergence of Azerbaijani modernisation ambitions, Latvian green and logistics expertise, and the reconfigured geography of European trade has created conditions for the bilateral relationship to punch above its statistical weight. The numbers are still small, perhaps, but the trajectory is there.