After nearly three decades of conflict, Azerbaijan and Armenia are witnessing developments that would have been difficult to imagine only a few years ago. For some time now, weapons have effectively fallen silent between the two countries, while contacts between NGOs and limited exchanges involving officials have gradually increased. Against this backdrop, Armenian Prime Minister Nikol Pashinyan recently announced that the first product from Armenia had been exported to Azerbaijan.
He did not specify what the product was or which companies were involved, however, the announcement is important as limited commercial relations between the two countries have already begun, with Azerbaijani fuel becoming the first known product exported to Armenia. The emergence of an Armenian export to Azerbaijan suggests that trade may now be developing in both directions. If a lasting peace is to be established, economic ties could play an important role in building mutual confidence.
Businesses that develop customers, suppliers and investments across borders have a direct interest in stability. However, the harder question is which Armenian products could actually compete in the Azerbaijani market. Agriculture, processed food, textiles, construction materials and beverages are among Armenia's established sectors, and some of these areas may even face significant competitive pressure in Azerbaijan.
Since independence, Azerbaijan has developed substantial agricultural and food-processing capacity. Agriculture remains an important part of the non-oil economy. In contrast, agricultural and agro-industrial exports reached around $1.3 billion in 2025.
Besides, Azerbaijan has also developed established supply chains for fruit, vegetables and processed food. This makes it difficult to imagine Armenian producers rapidly gaining a large share of the Azerbaijani market in conventional agricultural products. Azerbaijan's oil-driven economic expansion produced a major construction boom and helped develop domestic production of cement, concrete, metal products and other materials.
Armenian producers would therefore face a market with considerable local capacity. Moreover, Armenia has a garment industry, but much of its production is concentrated in clothing and sewing rather than large-scale textile manufacturing. In Azerbaijan, Armenian products would also have to compete with well-established Turkish brands and suppliers.
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