by Khalid Taimur Akram

Prime Minister Shehbaz Sharif received a warm welcome upon his arrival in Baku by Azerbaijan’s President Ilham Aliyev for a two-day visit (24 - 25 February 2025). The visit marks a significant milestone in deepening bilateral ties and renewing commitments to mutual growth between Pakistan and Azerbaijan. Both countries have reaffirmed their unwavering dedication to enhancing cooperation across various fields, including trade, investment, energy, defense, education, climate action, and regional connectivity.

Expanding Bilateral Cooperation

During the visit, both sides engaged in extensive discussions on areas of mutual interest to further strengthen bilateral cooperation, particularly in energy, trade, defence, education, and climate sectors. Several Memoranda of Understanding (MoUs) and agreements were signed, highlighting the commitment of both nations to fostering economic collaboration and exploring new avenues of partnership for shared development. Prime Minister Shehbaz Sharif emphasized the importance of joint investments in key sectors such as energy, agriculture, information technology, and infrastructure. These discussions aimed to elevate bilateral relations, with a focus on trade expansion, investment promotion, and exploring new opportunities for collaboration. Pakistan and Azerbaijan share a deep-rooted brotherly relationship built on mutual trust, understanding, and longstanding cooperation. Azerbaijan remains one of Pakistan’s key economic and strategic partners, with strong collaboration across multiple sectors.

As part of the visit, Prime Minister Shehbaz Sharif delivered a keynote speech at a business forum organized in collaboration with the Export and Investment Promotion Agency of the Republic of Azerbaijan (AZPROMO). The forum facilitated direct engagement between business leaders from both countries, fostering new commercial partnerships.

Key Agreements and Investments

During a joint press conference, Prime Minister Shehbaz Sharif expressed gratitude for Azerbaijan’s commitment to investing $2 billion in Pakistan. He confirmed that both sides had set a one-month deadline to finalize arrangements, with a high-level Azerbaijan delegation scheduled to visit Pakistan in April 2025 to sign the agreements. The two countries acknowledged the need to increase bilateral trade, which currently remains at a high level.

Energy cooperation remains a cornerstone of Pakistan-Azerbaijan relations. The State Oil Company of Azerbaijan Republic (SOCAR) and Pakistan’s energy partners extended their Liquefied Natural Gas (LNG) framework agreement by two years. Additionally, a trading company was established to facilitate future energy deals between the two nations. The potential of Gwadar Port as a key hub for imports and exports, emphasizing enhanced connectivity between the two countries for regional economic benefits.

Azerbaijan has already acquired defense industry equipment from Pakistan, and both leaders discussed opportunities for joint manufacturing of defense industry items. Azerbaijan recently purchased JF-17 Block III fighter jets from Pakistan in a $1.6 billion deal, further strengthening military collaboration. The two countries have a history of military cooperation, including Pakistan's participation in an eight-day joint military drill with Azerbaijan and Turkey in 2021 as part of a tripartite military agreement. PM Shehbaz Sharif proposed the establishment of joint defense production facilities, emphasizing their strategic importance.

Enhancing Economic Partnerships

To strengthen financial and capital markets, the Baku Stock Exchange (BSE) and Pakistan Stock Exchange (PSX) signed a memorandum of understanding to enhance bilateral cooperation. The agreement, signed by BSE Chairman Ruslan Khalilov and PSX CEO Farrukh Sabzwari, aims to promote investment opportunities and financial sector development in both countries.

The establishment of the Azerbaijan Chamber of Commerce in Islamabad is expected to facilitate and enhance bilateral trade. This move reflects Azerbaijan’s commitment to increasing economic ties with Pakistan by providing a structured platform for businesses to collaborate and expand trade relations. The operationalization of direct flights between Pakistan and Azerbaijan has already boosted people-to-people ties. Over 72,000 Pakistanis visited Azerbaijan in 2024 for business and tourism, marking a 25% increase from the previous year’s figure of 55,000 travellers. Both sides have also pledged to work together in global forums, including the United Nations and the Shanghai Cooperation Organization (SCO), to promote peace, stability, and sustainable development.

Cultural and People-to-People Ties

One of the most promising aspects of Pakistan-Azerbaijan relations is the increasing cultural and people-to-people exchanges. An MoU was signed between the cities of Lahore and Nakhchivan to boost cultural, tourism, economic, and scientific cooperation. Direct flights between Pakistan and Azerbaijan have further strengthened these ties, with over 72,000 Pakistanis visiting Azerbaijan in 2024 for business and tourism, marking a 25% increase from the year 2023.

The visit of Prime Minister Shehbaz Sharif to Azerbaijan has solidified the longstanding brotherly ties between the two nations. The future of Pakistan-Azerbaijan relations looks promising, with both nations eager to explore new avenues of cooperation. The energy sector holds immense potential, as Pakistan continues to seek cost-effective and sustainable energy solutions, while Azerbaijan stands as a reliable energy supplier. The upcoming visit of an Azerbaijani delegation to Pakistan in April 2025 is expected to yield further agreements and concrete investment commitments, reinforcing the strategic partnership between the two countries.

Agreements with Pakistan will pave the way for deeper economic integration and regional connectivity as Azerbaijan is an important link point for trade corridors. The strong leadership and shared vision of President Ilham Aliyev and Prime Minister Shehbaz Sharif are expected to transform this partnership into a model of regional cooperation, benefiting not just the two nations but the broader region as well.

Khalid Taimur Akram is an Executive Director at the Pakistan Research Center for a Community with Shared Future (PRCCSF), Islamabad.

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