Azerbaijan is preparing to introduce another support mechanism aimed at expanding non-oil and gas exports. Under a decree signed by President Ilham Aliyev on June 9, 2026, the state will cover part of the transportation costs incurred when exporting Azerbaijani-origin non-oil and gas products. The mechanism will take effect on September 1, 2026, and will apply to exports and domestic transportation carried out through September 30, 2036.
At first glance, the measure may appear to be a subsidy aimed at reducing transportation costs for exporters. Its economic significance, however, is broader. The mechanism is designed to reduce the cost of bringing Azerbaijani non-oil and gas products to foreign markets, facilitate access to new markets, and potentially change the geographical structure of exports.
The challenge is not only production, but market access Despite the growth in Azerbaijan’s non-oil and gas exports in recent years, further expanding export opportunities requires taking into account a number of structural factors. According to the State Statistics Committee, non-oil and gas exports amounted to $3.63 billion in 2025. In nominal terms, this was 8.1% higher than in 2024, while in real terms, the figure declined by 18.1%.
This dynamic reflects the impact of price and other market factors and points to further opportunities to increase export volumes. For Azerbaijani companies, entering foreign markets depends not only on producing competitive goods but also on ensuring their delivery at an acceptable cost. When accessing more distant and alternative markets in particular, logistics costs can have a noticeable impact on the final price of products.
This is especially relevant for sectors such as agriculture and food processing, where transportation costs can have a significant effect on production costs. At the same time, logistics remains one of the factors shaping international competitiveness for higher value-added industrial products as well. This is why the development of transport infrastructure and the reduction of logistics costs are viewed as important areas for expanding export potential.
The decree identifies high logistics costs as one of the factors affecting export diversification. It notes that a significant share of long-distance transportation costs in the final price of goods can constrain the expansion of export geography and product range, highlighting the importance of further strengthening the country’s logistics capabilities. Non-oil exports are growing, but geographical diversification remains a challenge Azerbaijan's non-oil and gas exports recorded significant growth in the first seven months of 2026.
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