Uzbekistan and Azerbaijan have set a target of increasing bilateral trade to $1 billion by 2030, as economic ties expand from a relatively low base into vehicle manufacturing, oil and gas, investment, and transport across the Caspian Sea.
Azerbaijani President Ilham Aliyev’s state visit to Uzbekistan on August 23–24 added new projects to that list. The two presidents signed a Treaty on Eternal Friendship and a program aimed at increasing bilateral trade to $1 billion by 2030.
Political relations, meanwhile, have been moving faster than economic ties. In 2023, the two countries established the Supreme Interstate Council, and a year later they signed a Treaty on Allied Relations. The latest trip was Aliyev’s third state visit to Uzbekistan in five years and his seventh visit overall.
Aliyev said ahead of his trip to Tashkent that bilateral trade more than tripled in 2025 to reach $795 million. Uzbekistan’s Center for Economic Research and Reforms, however, reported a much lower total of $307.3 million for the same year. Neither side has explained the discrepancy, which may reflect different definitions of trade. Sustaining growth toward the $1 billion target will require broader trade and more joint production, including goods aimed at markets beyond the two countries.
From Trade to Investment
The Azerbaijan-Uzbekistan Investment Company is intended to help turn some of these plans into operating businesses. Established in 2023 with $500 million in capital, the company finances projects in both countries.
Some areas of cooperation have already reached the production stage. Azerbaijan’s Azermash CP works with Uzbek manufacturers to produce Chevrolet and Isuzu vehicles in Azerbaijan. By July, more than 10,700 Chevrolet vehicles and 275 Isuzu buses had been produced. More than 130 commercial entities with Uzbek investment are registered in Azerbaijan.
During the latest visit, the two sides opened a gypsum plant. They also laid foundations for five SOCAR filling stations and a silver-ore enrichment plant.
For Baku, the interest in Uzbekistan is understandable. With a population of more than 38 million, Uzbekistan is Central Asia’s most populous country. The Uzbek economy is growing rapidly, while the authorities are opening more sectors to private and foreign capital. For Azerbaijani companies, this offers access to a market considerably larger than their own as well as a foothold in Central Asia.
For Tashkent, Azerbaijan offers investment and expertise in the oil and gas sector. SOCAR, the Azerbaijani state oil company, has been operating in Uzbekistan for years. A joint venture between Uzbekistan’s O‘ZLITINEFTGAZ and the Azerbaijani company’s research institute has been operating since 2016. Cooperation is now gradually moving from engineering services toward much larger exploration and potential production projects.
The main project is on the Ustyurt Plateau in western Uzbekistan. BP joined the project in May 2026 with a 40% stake, while SOCAR, which is the operator, and Uzbekneftegaz each hold 30%. Total investment could reach around $2 billion if commercially viable reserves are found and the project proceeds to development.
As previously reported by The Times of Central Asia, the project envisages extensive seismic surveys followed by exploratory drilling. If sufficient reserves are discovered, the next stage could involve the development of full-scale production infrastructure.
During the latest visit, Aliyev said he hoped drilling of production wells could begin in 2027 if the exploration work produces positive results. This would be significant for bilateral relations: oil and gas cooperation would move beyond research and exploration into major capital-intensive projects.
In the longer term, however, Azerbaijan’s geography may be no less important for Uzbekistan.
Uzbekistan is one of only two doubly landlocked countries in the world: to move cargo to the open sea, it must cross the territory of at least two other countries. This makes the cost and reliability of transport routes a distinct factor in the competitiveness of the Uzbek economy.
Azerbaijan provides a key western link for routes across the Caspian. Uzbek cargo can travel through Kazakhstan to Aktau or Kuryk, or through Turkmenistan to Turkmenbashi, before crossing the Caspian to Azerbaijan and continuing through Georgia and Turkey.
This is why transport is appearing increasingly often on the agenda of talks between Tashkent and Baku. Uzbekistan is interested in expanding shipments across the Caspian, while Azerbaijan wants a larger share of Central Asia’s rapidly growing trade with Turkey and Europe to move through its ports and railways.
The China–Kyrgyzstan–Uzbekistan railway could eventually provide an additional source of cargo. Construction began in December 2024 and was continuing in 2026. If connected with Caspian routes, it would give Tashkent another option for moving both Chinese cargo and Uzbek products westward. For Baku, it would offer an opportunity to become part of a longer transport chain linking China, Central Asia, the Caucasus, and Europe.
Here, however, the gap between plans and existing infrastructure remains more pronounced than it is in trade.
The Middle Corridor requires several trans-shipments: from rail to ship on the eastern shore of the Caspian and then back onto rail in Azerbaijan. Its capacity remains constrained by port and ferry bottlenecks and the need for coordination across several countries. The route therefore expands Uzbekistan’s options, but it does not yet remove the country’s main logistical constraints.
The transport link is gradually being complemented by an energy component. Azerbaijan, Kazakhstan, and Uzbekistan are working on a “green” energy corridor across the Caspian.
In 2025, the three countries established Green Corridor Union LLC to coordinate plans to export renewable electricity from Central Asia across the Caspian and through Azerbaijan toward Europe.
Azerbaijan has been steadily expanding its relations with Central Asia as a whole. It is developing transport projects with Kazakhstan, and in November 2025 became a full participant in the Consultative Meetings of the Heads of State of Central Asia.
For both sides, the logic is straightforward: Uzbekistan gains another western transport route and source of investment, while Azerbaijan gains freight traffic and greater access to Central Asia’s most populous market.
The conflicting 2025 trade figures complicate any assessment of the $1 billion target. A more telling measure of the partnership will be how many announced projects enter production and how quickly freight traffic across the Caspian grows.
