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US President Donald Trump on Friday took on a role in the ongoing Azerbaijan-Armenia peace process and presided over the signing of a draft peace deal by Azerbaijani President Ilham Aliyev and Armenian Prime Minister Nikol Pashinyan. Observers immediately noted that this “agreement” was a mere repackaging of the framework deal the two countries signed in March. It had been negotiated bilaterally and achieved without outside involvement. At that time, it was also recognized that several issues still had to be addressed before the peace process could be completed.

The disputes between Azerbaijan and Armenia are only one part of the issues that bedevil the South Caucasus region, which foreign policy analyst Jeffrey Mankoff described in a December 2024 Center for Strategic and International Studies report as a “shatter zone and choke point” that links Europe with Eurasia. The region consists of three states — Azerbaijan, Armenia and Georgia — that obtained sovereignty following the breakup of the Soviet Union.

The fallout of that breakup has been untidy: Russian maintained claims on Georgia’s Abkhazia and South Ossetia areas, two wars took place between Azerbaijan and Armenia over the disputed territory of Nagorno-Karabakh, and Russia invaded Georgia in 2008 to prevent it drifting further toward the EU and NATO.

The geography of the South Caucasus has attracted the attention of Turkiye and Iran, as well as global powers the US and Russia. More recently, China and India have also entered the region, with their competition in South Asia being reflected in the South Caucasus. As the corridor from Europe to the heart of Eurasia, much of the competition in the region has centered on rival connectivity projects. In 2018, Brussels initiated the EU-Asia Connectivity Strategy to pursue land transport, energy, digital and people-to-people links. 

The South Caucasus has attracted the attention of Turkiye and Iran, as well as global powers.

Talmiz Ahmad

China has entered the scene with its Belt and Road Initiative. The project’s Northern Corridor takes goods from China through Russian territory to Europe. But the Ukraine war means attention has now shifted to the Middle Corridor, which goes through the South Caucasus and the Caspian basin to reach Europe. While the Middle Corridor is being developed, the Trans-Caspian International Transport Route has brought together traders from China, the South Caucasus, Central Asia, Turkiye and Lithuania in an intraregional embrace.

India’s interests in the South Caucasus include economic and geopolitical considerations. Over the last decade, New Delhi has built economic ties with each state in the region. There are 200 Indian companies in Azerbaijan, while India imports Azerbaijani oil valued at more than $1.6 billion annually. It has relatively modest trade ties with Georgia but has emerged as the largest supplier of arms to Armenia, making up for shortfalls in Russian supplies due to the Ukraine war.

India has also viewed with concern the expanding ties between Azerbaijan, Turkiye and Pakistan. In 2021, the “Three Brothers” issued the Baku Declaration to strengthen strategic ties, particularly military-technological cooperation. Azerbaijan’s partners back Baku over its conflict with Armenia, while Azerbaijan and Turkiye support Pakistan on the Kashmir issue.

This has encouraged India to pursue a rival bloc with Armenia and Iran. India provides Armenia with its best military equipment. It is also seeking to consolidate its strategic presence in the region by using Armenia to build ties with the Russia-sponsored Eurasian Economic Union by obtaining observer status in the grouping and negotiating a free trade agreement with it. India and Iran also share an interest in developing the 7,200 km International North-South Transport Corridor that goes from Iran’s Chabahar port through Azerbaijan to Moscow, as well as the Gulf-Black Sea trade route from Iran to Armenia and on to Europe, which complements the former. 

China has emerged as a significant presence in the South Caucasus, largely through its Belt and Road Initiative projects.

Talmiz Ahmad

Obviously, there is no zero-sum scenario in the region: Azerbaijan is India’s principal trade partner in the South Caucasus and is also a crucial presence in ensuring the success of the International North-South Transport Corridor. The completion of the final missing link, the Rasht-Astara railway in Azerbaijan, by 2028 will make the corridor fully operational.

To complicate the picture, China has now emerged as a significant presence in the South Caucasus, largely through its Belt and Road Initiative projects and other infrastructure investments linked with the Middle Corridor. China has close economic ties with all the South Caucasian states and their neighbors, Turkiye and Iran. It has strategic partnership agreements with Turkiye, Georgia and Azerbaijan, a comprehensive strategic partnership agreement with Iran and substantial economic ties with Armenia. Its total bilateral trade with these five states totals $120 billion.

Despite the opportunities for significant connectivity projects and the vast untapped potential for expanded economic ties, there can be little doubt that the US’ entry into South Caucasus affairs to compete with Russia and China and promote its own geopolitical interests will increase regional tensions.

India’s interests therefore lie in promoting the long-term stability of the fragile regional security landscape by seeking opportunities for cooperation with Azerbaijan and China, rather than allowing South Asian rivalries to resonate in the region.

• Talmiz Ahmad is a former Indian diplomat.