Azerbaijan – Czech Republic: Trade, trust, and investment Caliber.Az review

In recent years, Azerbaijan has been actively strengthening its economic ties with the countries of Southern and Central Europe. This geographical direction holds strategic importance for Baku, serving as a key pillar of the long-term export strategy under the Southern Gas Corridor (SGC) project and encompassing some of the major buyers of Azerbaijani oil. However, Azerbaijan’s focus within the European Union is increasingly shifting toward expanding cooperation beyond the energy sector — and the Czech Republic stands out as a particularly important partner in this regard.

On July 22, during a working visit to the Czech Republic, Azerbaijani Minister of Economy Mikayil Jabbarov took part in a roundtable discussion in Prague. There, he met with Czech business leaders to explore opportunities for deepening bilateral cooperation in non-oil sectors.

Since the establishment of diplomatic relations on January 29, 1993, Azerbaijan and the Czech Republic have developed a strong partnership grounded in mutual respect and cooperation — including collaboration within international organisations. This pragmatic relationship is further supported by a robust legal framework encompassing nearly thirty agreements, most of which focus on economic and trade matters. These factors have contributed significantly to the steady growth of bilateral trade and economic ties.

In 2011, Azerbaijan and the Czech Republic signed the Agreement on the Promotion and Mutual Protection of Investments, and that same year, the Azerbaijani-Czech Intergovernmental Commission on Economic, Scientific-Technical and Cultural Cooperation began its work. In 2014, the Czech Export Promotion Agency CzechTrade opened a permanent office in Baku. A major milestone in fostering long-term cooperation between the two countries was the signing of a Joint Declaration on Strategic Partnership in 2015.

Azerbaijan and the Czech Republic have actively developed cooperation across a wide range of sectors, including transport, oil and chemical industries, mechanical engineering, agriculture and food processing, information and communication technologies, energy, railway infrastructure, pharmaceuticals, and environmental protection. Czech companies have taken part as contractors and equipment suppliers in eight major infrastructure and industrial projects in Azerbaijan, with a total value of around 2 billion manats ($1.17 billion).

One example is the participation of Czech firms DESTILA Brno and PALI Chotěboř in the construction and equipment supply for the BAKI-PRAQA brewery in the Novkhani settlement, which opened in 2010. In April 2015, the Czech company Moravia Steel signed an agreement with Azerbaijan Railways CJSC to carry out major repairs on the Baku–Boyuk Kesik railway line. In 2019, a group of Czech companies led by Moravia Steel completed the reconstruction of the Azerbaijani section of the Baku–Tbilisi–Kars railway corridor.

Ten years ago, the agricultural ministries of both countries signed a special memorandum of understanding on cooperation in the agricultural sector. In 2017, Ganja Automobile Plant and Czech manufacturer Tatra signed a cooperation memorandum, significantly increasing the supply of Tatra trucks to Azerbaijan.

Moreover, the Czech Republic has become one of the most popular tourist destinations for Azerbaijani citizens. Since the launch of direct air passenger flights between Prague and Baku in July 2010 and the introduction of electronic visas, inbound tourism to Azerbaijan from the Czech Republic has also grown significantly.

Notably, the strong momentum of business cooperation between Azerbaijan and the Czech Republic has also driven the steady development of bilateral trade. Over the past decade, Azerbaijan has accounted for 85% of the Czech Republic’s total trade turnover with the South Caucasus region.

Azerbaijan’s exports to the Czech Republic are dominated by crude oil and petroleum products, with smaller volumes of vegetable oils, cotton, dried fruits, and nuts. Czech exports to Azerbaijan mainly consist of passenger cars, trucks and other vehicles, along with industrial and electronic equipment, chemical products, glassware, foodstuffs, and other goods.

Given these dynamics, it is no surprise that bilateral trade has shown steady growth in recent years. A key driver of this growth is the export of Azerbaijani hydrocarbons, which account for over 30% of the Czech Republic’s total oil imports. In 2024 alone, Azerbaijan exported more than 1.77 million tonnes of crude oil to the Czech Republic, worth over $1.081 billion.

According to the State Customs Committee of Azerbaijan, between January and April 2025, Azerbaijan exported 558.7 thousand tonnes of crude oil and petroleum products derived from bituminous substances to the Czech Republic — 134 thousand tonnes more than in the same period last year, marking a 31.6% increase in volume. During this reporting period, the Czech Republic ranked second among countries importing the largest volume of Azerbaijani oil.

According to information provided by the Ministry of Economy of Azerbaijan to Caliber.Az, total Azerbaijan–Czech Republic trade turnover in 2024 exceeded $1.153 billion, representing a 50.34% increase compared to the previous year. As a result, Azerbaijan recorded a positive trade balance of over $1.023 billion.

Judging by the recent talks held in Prague between Minister of Economy Mikayil Jabbarov and representatives of the Czech business community, these positive trends are expected to continue in the current year. In January–June 2025, trade turnover between the two countries amounted to approximately $485 million, and there is considerable potential for further growth by the end of the year.

“Relations between the two countries are built on mutual trust and shared strategic priorities. Trade and economic ties with the Czech Republic are progressing successfully, and there is significant potential for effective cooperation in energy, transport, industry, trade, and other areas,” noted Minister Jabbarov. “Currently, 25 Czech companies operate in Azerbaijan, engaging in agriculture, industry, transport, construction, trade, and services.”

During the roundtable discussion, David Müller, Director General of the EU and Foreign Trade Department at the Czech Ministry of Industry and Trade, emphasised the mutually beneficial cooperation between the two countries in the development of transport infrastructure. The participants also discussed specific steps to expand business relations, identifying promising areas for joint investment projects.

The forum featured presentations by several Czech companies — Chemoprojekt, Czechoslovak Group, Mavel, Omnipol, Škoda, TES VSETIN, and VSL Group Activities — showcasing their operations and products. These firms were introduced as potential partners for future collaborations with Azerbaijan. Czech companies were invited to take part in projects within the Alat Free Economic Zone (FEZ), industrial parks, and other industrial clusters across Azerbaijan.

As part of his working visit to the Czech Republic, Minister of Economy Mikayil Jabbarov also held meetings with Minister of Industry and Trade Lukáš Vlček and Minister of Transport Martin Kupka. The discussions focused on increasing bilateral trade turnover through broader economic cooperation and joint initiatives in energy, industry, transport, transit, tourism, and investment.

The parties also explored opportunities to develop an innovation ecosystem, the space industry, and start-up collaborations. In addition, productive talks were held with the leadership of Czech conglomerate Agrofert on sustainable agricultural practices and the transition to resilient production methods, as well as with Škoda Group regarding the potential application of its advanced technologies and expertise in Azerbaijan.