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CWA # 1613, 10 March 2025
NIAS Pakistan Reader
PM Sharif’s Visit to Azerbaijan and Uzbekistan: Connectivity, Defence, Energy and Politics

  Abhiruchi Chowdhury

What happened?
On 23 February, PM Shehbaz Sharif visited Azerbaijan for two-day official visit which was followed by his visit to Uzbekistan. Azerbaijan and Pakistan have agreed to increase “bilateral investment” to USD two billion.

With Uzbekistan, Pakistan expressed its ambition to increase bilateral trade engagement to USD two billion.

On 4 March, PM Sharif formulated a committee which would be headed by Deputy PM and Foreign Minister Ishaq Dar which will make sure that the signed MoUs with Azerbaijan are enacted speedily.  

During PM Sharif’s visit to Azerbaijan, four MoUs were inked between Pakistan’s Frontier Works Organization, Pakistan State Oil and Azerbaijan’s State Oil Company of Azerbaijan Republic. One of the MoUs signed is regarding the Machike-Thailan-Tarujabba White Oil pipeline project which will link Machike in Punjab to Tarujabba in Khyber Pakhtunkhwa. The project is expected to supplement the oil pipeline which runs from Karachi to Peshawar. With the commencing of the pipeline project, it is anticipated that it would bring down the cost of transportation and curb environment pollution. In addition to that, the 427 km pipeline would enable seamless supply of petroleum derived products from Karachi to Peshawar.

With Uzbekistan, an MoU was inked between Lahore and Bukhara for formulating “twin-city relations.” The two countries also signed agreement which would enhance news collaboration among Associated Press of Pakistan and National Information Agency of Uzbekistan. Both sides also agreed for establishing Pakistan-Uzbekistan High-Level Strategic Council. Further, the two sides inked agreements to cooperate in science, technology, and innovation.    
What is the background?
First, Pakistan’s trade relations with Azerbaijan and Uzbekistan. The volume of trade between Pakistan and Azerbaijan in 2024 amounted to USD 22 million, an increase of USD 4.9 million from the previous year. The increase in trade could be attributed to the 15 MoUs inked between the two countries during President Ilham Aliyev’s visit to Pakistan in July 2024. Bilateral trade volume between Pakistan and Uzbekistan surpassed USD 400 million in 2024. Pakistan primarily exports rice, finished garments, meat, and sports gear to Uzbekistan while it imports chemical fertilizers, vegetables and cotton yarn. In 2023, both countries had inked USD one billion bilateral trade deal to increase their cooperation in tourism sector, textile, banking, oil and natural resources and enhance cultural engagement.

Second, Pakistan’s search to increase connectivity with Uzbekistan. Pakistan discussed its interest in starting the railway line which would connect the two countries and would go through Afghanistan. The two countries had earlier agreed upon the Uzbekistan-Afghanistan-Pakistan railway line project in 2023. Also, flights have started to operate between Tashkent and Lahore. Both the countries are also looking to start new flight routes between Samarkand, Bukhara and Karachi. The two countries have also agreed upon visa exemption for diplomats and people working in military intelligence, internal affairs and who are engaged in professional and technical training.

Third, the Afghanistan factor in Pakistan’s relations with Uzbekistan. Peace and stability in Afghanistan are extremely crucial for Pakistan’s projects with Uzbekistan to prove fruitful. Pakistan’s ties with the Taliban has been a major irritant with its relations with Uzbekistan. Taliban in Afghanistan was seen as a security threat to Uzbekistan, given Taliban’s opposition to Uzbek groups in Afghanistan. Pakistan and Uzbekistan also face the threat from the presence of Islamic State in the Central Asia and Afghanistan. Other militant groups such as Islamic Movement of Uzbekistan and Islamic Jihad Union who have been given refuge in Afghanistan are seen as security concerns by both the countries. As a result, investors are reluctant to infuse funds in projects which could possibly be targeted by the militant groups in future.

Fourth, defence cooperation between Pakistan and Azerbaijan. After Azerbaijan’s largest weapon supplier- Russia got involved in the Ukraine war and its prime rival- Armenia looked to strengthen defense ties with India, Azerbaijan turned to Pakistan for diversifying its arm purchase.  In 2024, Pakistan and Azerbaijan inked an arms agreement worth USD 1.6 billion. Under this accord, Pakistan agreed to supply JF-17 Thunder Block III fighters to Azerbaijan.

Fifth, political support for each other’s positions on India and Armenia. Azerbaijan has continually backed Pakistan’s stance on the dispute over Jammu and Kashmir with India. Azerbaijan was a part of the Islamabad declaration (2021) along with Turkiye that voiced distress over India allegedly amending the status of Jammu and Kashmir in 2019. The declaration demanded for a peaceful resolution to the dispute over Jammu and Kashmir as per UN Security Council resolutions. Pakistan, too supported Azerbaijan’s claim over Nagorno-Karabakh region which is in contention with Armenia. The Islamabad declaration also called for ceasing of Azerbaijan-Armenia clash. It reiterated the call to respect the sovereignty of Azerbaijan over its territory as per UN Security council resolution.

What does it mean?
First, the MoUs signed with Azerbaijan and Uzbekistan might not necessarily translate into increase in trade volume. Pakistan is likely to experience an increase in water shortages which would impact the exports of agricultural products to the two countries.
 
Second, the resurgence of Tehreek-e-Taliban in Pakistan is likely to impede the construction of railway line project with Uzbekistan. Also, it would be very difficult for Islamabad and Tashkent to increase people to people contact, given the surge in numbers of illegal migration emancipating from Pakistan.

References
“In PM’s Baku visit, Pakistan and Azerbaijan vow boosting bilateral investment to $2bn,” Dawn, 24 February 2025
“Pakistan and Uzbekistan agree to expand bilateral trade to $2bn,” Dawn, 26 February 2025
Dilan Pamuk, “Turkey, Azerbaijan, Pakistan issue joint declaration,” AA, 14 January 2021
“PM Shehbaz forms Dar-led body for ‘early realisation’ of accords with Azerbaijan,” Dawn, 4 March 2025
 “$1billion trade deal signed with Uzbekistan,” The Express Tribune, 24 February 2023

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