Azerbaijan eyes major expansion in trade, investment ties with Pakistan

In this file photo, taken on November 7, 2025, Pakistan Prime Minister Shehbaz Sharif meets President of Azerbaijan Illham Aliyev in Baku. (Handout/PMO/File)
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Updated 21 November 2025
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Azerbaijan eyes major expansion in trade, investment ties with Pakistan

  • Azerbaijan removes customs duty on Pakistani rice as both nations push to grow trade far beyond current volume
  • Senior aide to President Aliyev says policy, defense, energy cooperation rising but private sector must play larger role

BAKU: Azerbaijan said on Friday it is preparing for a significant expansion of economic, defense and investment cooperation with Pakistan, with a senior aide to President Ilham Aliyev telling Arab News bilateral political ties were already at a “strategic level” even as trade remains well below potential.

The remarks come as both governments intensify engagement after a series of high-level visits, including Prime Minister Shehbaz Sharif’s participation in Baku’s Victory Day parade this month and President Aliyev’s state visit to Pakistan last year.

Despite consistently close political alignment — Islamabad was among the first to recognize Azerbaijan’s independence in 1991 — the economic relationship has historically lagged behind.

“We already see the steady growth in the economic and trade relations between the two countries but it’s not satisfactory,” Hikmet Hajjiyev, Head of the Foreign Policy Department at the Azerbaijani Presidential Administration, told Arab News on the sidelines of the D-8 media summit.

“It’s not commensurate to the level of the political relation between the two countries, and therefore we think that both governments and private sector and business communities should do even more to increase our trade relationship.”

A key recent step, Hajjiyev revealed, was Azerbaijan’s removal of customs duties on Pakistani rice, which he said had already lowered market prices and opened space for larger import volumes.

Defense cooperation is also intensifying, Hajjiyev said as he pointed to the participation of Pakistan’s JF-17 Thunder fighter jet in Azerbaijan’s most recent Victory Day military parade, calling it “another strong indicator” of the countries’ growing strategic cooperation in the defense industry.

Investment ties are widening as well, with Azerbaijani institutions exploring opportunities in Pakistan.

“Azerbaijan is a potential investment country,” Hajjiyev said. “Our institutions are actively working with Pakistani counterparts to explore investment options.”

On the scale of future investments, he said it was “premature to discuss figures” as both government entities and the private sector continue assessing proposals:

“But investment always goes to friendly countries, and Pakistan is one of them.”

Energy is another emerging area of bilateral collaboration, with both sides examining ways to strengthen cooperation across the sector. People-to-people links have expanded in parallel, driven by a sharp increase in direct flights between major cities, the presidential aide said.

“This has strengthened humanitarian interaction and boosted tourism,” Hajjiyev said. “Daily flights have enhanced connectivity and made travel easier.”

From political dialogue and defense to trade, tourism and investments, Hajjiyev said both countries were committed to deepening what he described as a long-standing strategic partnership.

“Both countries have supported each other since Azerbaijan’s independence, and this cooperation will continue to grow,” he said.


US commits $1.25 billion EXIM financing for Pakistan’s Reko Diq mine — envoy

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US commits $1.25 billion EXIM financing for Pakistan’s Reko Diq mine — envoy

  • Financing could unlock up to $2 billion in US mining equipment exports, create 13,500 jobs across Pakistan and US
  • Move aligns with Pakistan’s push to close $3.5 billion debt package for world-class copper-gold mine in Balochistan

KARACHI: Washington has approved $1.25 billion in US Export-Import Bank financing for Pakistan’s Reko Diq copper-gold mine, Acting US ambassador Natalie Baker said in a video message on Wednesday, adding that the package could unlock up to $2 billion in US equipment and service exports for the project.

The facility, one of the largest US financing decisions in Pakistan’s minerals sector, is expected to help pave the way for US-sourced mining technology, drilling machinery and operations support, while creating jobs in both countries and accelerating development of one of the world’s largest untapped copper deposits.

The $7 billion Reko Diq project, located in the mineral-rich southwestern province of Balochistan, is being developed by Canadian mining giant Barrick Gold in partnership with Pakistan’s federal and provincial governments. The mine is central to Pakistan’s effort to expand exports, attract foreign investment and open the country’s largely untapped critical minerals reserves, a segment where copper plays a key role in electric vehicles, renewable energy, AI hardware and global supply chains. Saudi Arabia’s Manara Minerals, a Public Investment Fund and Ma’aden joint venture, has also expressed intent to acquire a 15 percent stake.

“I am pleased to highlight the US Export-Import Bank recently approved financing of $1.25 billion to support the mining of critical minerals at Riko Diq in Pakistan,” Baker said.

“In the coming years, EXIM’s project financing will bring in up to $2 billion in high-quality US mining equipment and services needed to build and operate the Riko Diq mine, along with creating an estimated 6,000 jobs in the US and 7,500 jobs in Balochistan, Pakistan.”

The envoy added that the deal reflects the strategic direction of US commercial diplomacy.

“The Riko Diq project serves as the model for mining projects that will benefit US exporters as well as local Pakistani communities and partners by bringing employment and prosperity to both our nations,” Baker added. “The Trump administration has made the forging of deals exactly like this one central to American diplomacy.”

SECURITY CHALLENGES

Speaking to Arab News last month, Pakistan’s Finance Minister Muhammad Aurangzeb said the broader debt package for Reko Diq was nearly complete, anchored by the International Finance Corporation (IFC) and expected to total about $3.5 billion.

“The financial close, from my perspective, is around the corner,” he said, adding that EXIM participation had been delayed only due to a temporary US government shutdown restrictions, now lifted.

If financing closes on schedule, Reko Diq is projected to generate $2.8 billion in export potential in its first year of shipment, nearly 10 percent of Pakistan’s existing export volume, and could embed the US as a long-term strategic investor alongside Canadian and Saudi partners. The project added 13 million ounces to Barrick’s gold reserves in 2024 and is expected to produce 200,000 metric tons of copper a year in its first phase, doubling after expansion, with projected free cash flow of more than $70 billion over 37 years.

Lenders including the International Finance Corporation and the Asian Development Bank among others are assembling a financing package exceeding $2.6 billion.

Balochistan suffers frequent attacks by separatists and other militants, making security a major concern for the mining scheme. The project also requires a railway line upgrade to transport copper concentrate to Karachi for processing abroad.

Barrick returned to Pakistan in 2022 after a years-long legal dispute was settled, and the mine has since become a flagship investment for the country as it seeks to draw more capital into its minerals sector.