Geopolitics and Foreign Policy

Updated on August 14, 2025 This APRI Armenia Analysis outlines the implications of this step forward for Armenia, Azerbaijan, their long-running peace process, and relations with their regional neighbors. While progress has been made toward a more stable South Caucasus, especially on the thorny issue of transit links, how the details will be interpreted and implemented, as well as how the regional powers will respond, will test the success of the renewed US involvement in the peace process. On August 8, 2025, Armenia, Azerbaijan and the United States signed a Joint Declaration (hereafter the “Joint Declaration” or “Declaration”) during a summit in Washington, DC (hereafter the “Washington Summit”). The Declaration sets forth the establishment of “unimpeded connectivity between the main part of Azerbaijan and (…) Nakhijevan through the territory of (…) Armenia with reciprocal benefits for international and intra-state connectivity for Armenia” through Azerbaijan. It also states that Armenia “will work with the United States and mutually determined third parties to set forth a framework for the “Trump Route for International Peace and Prosperity” (TRIPP) connectivity project” in its territory. The US-led agreement offers a solution to a long-standing dispute between Armenia and Azerbaijan over how and under what circumstances they would initiate transit links between their two countries. A ceasefire statement signed in November 2020 by Armenia, Azerbaijan, and Russia, after 44 days of intense hostilities, stipulated that transit links between the two countries would be restored, with the Border Guard Service of the Russian Federal Security Service responsible for overseeing the transport connections, but with Armenia and Azerbaijan disagreeing over the management and control of the routes. The solution put forth in Washington could give American entities the responsibility for building and managing transit routes for travelers across southern Armenia, in collaboration with Armenian authorities. According to Armenian officials, passport control and customs checks would be carried out by Armenian state institutions, with American support in building Armenia’s border and customs services’ capacities. Security, according to Prime Minister Pashinyan’s press interview, would be ensured by Armenia while American investment companies might have their own security providers in addition to the jurisdiction of the Armenian police, National Security Service, and legal system. Alongside the Joint Declaration, the leaders of Armenia and Azerbaijan initialed the text of an agreement to establish peace and normalize relations between the two countries. The initialing signifies a commitment to finalize the peace deal in the future, although there has been no timeline yet announced. Armenia and Azerbaijan also signed bilateral memoranda of understanding with the US. For Armenia, those agreements would bring increased US involvement in the fields of energy security, infrastructure development under the Armenian government’s Crossroads of Peace project, and technologies related to artificial intelligence and semiconductors. For Azerbaijan, ties with the US would expand with the establishment of a strategic partnership, which would include greater cooperation on defense, digital technologies, and energy. What Are the Implications for Armenia? The Joint Declaration significantly reduces the risk of military escalation between Armenia and Azerbaijan in the near term, allowing Yerevan to continue its efforts toward economic development and improving its defense capabilities. Greater partnership with the US on energy security, infrastructure, artificial intelligence, and semiconductors, in addition to what is already envisaged in the umbrella Strategic Partnership Charter, will likely boost those sectors of the Armenian economy. The Armenian government can publicly explain the benefits these deals would bring for Armenian businesses, as it did in the announcement of the Firebird AI project. It is worth noting that economic relations with Russia, the number one trade partner of Armenia, and with Iran may be altered by the move toward closer cooperation with the US. The unblocking of trade and transit with Azerbaijan—particularly if it unlocks trade and unfreezes diplomatic relations with Turkey—would create new challenges and opportunities for Armenia’s economy. Among other things, it may decrease exclusive dependencies, particularly on Russia. Absent a common understanding of the specifics and ownership of how the Joint Declaration will materialize, some vulnerabilities exist such as the potential for differences in legal interpretations and disputes on the ground during the build-up of the TRIPP. The TRIPP concept needs an implementation framework that will include coordination mechanisms, clarity on the funding plans, and potential deconfliction and mediation mechanisms. Importantly, Armenia has consistently stressed, including recently, that its border and connection with Iran should not be affected by any transit routes passing through Armenia. Should the proper functioning of their mutual border be negatively affected, this could jeopardize the new TRIPP. For the overall proposal to gain greater support, there needs to be clarification around the reciprocal trade route across Azerbaijan. While the Joint Declaration mentions “reciprocal benefits,” which implies that Armenian citizens and goods would benefit from passage through Azerbaijan, the language on how this will work has been vague. If it were to occur, access across Azerbaijan would be managed by Azerbaijani authorities, with no involvement of third parties to provide security or guarantee greater safety for Armenian travelers. This would be perceived as an imbalanced outcome and a deep concession from the Armenian side. The release of Armenian prisoners held in Baku, and the right of return and other protections for ethnic Armenians displaced from Nagorno-Karabakh, were not mentioned in the documents signed in Washington. Some reference to the latter could have been expected, given that President Trump had stated during the 2024 electoral campaign that he would support ending the persecution of Nagorno-Karabakh Armenians. The joint appeal by Armenia and Azerbaijan to dissolve the Organization for Security and Co-operation in Europe (OSCE) Minsk Group (a negotiation platform created in 1992 to generate a peaceful solution to the Nagorno-Karabakh conflict) will limit opportunities to raise issues related to the rights of that population or the circumstances of their forced removal by Azerbaijan in 2023. Moreover, since the peace agreement includes an article on withdrawing legal cases from international courts, Armenians will have few opportunities for the redress of human rights violations. This will anger segments

Profound shifts in the geopolitical dynamics of the South Caucasus, driven by the Second Nagorno-Karabakh War and the onset of the Russia-Ukraine War, have shaped the Armenian government’s pursuit of foreign policy diversification. This report analyzes key developments in and around Armenian foreign policy from November 2020—the end of the Second Nagorno-Karabakh War—through March 2025. It also offers recommendations to guide the overall trajectory of Armenian foreign policy, both broadly and at the level of specific bilateral relationships. The report is based on extensive desk research and draws on a wide range of publications, official statements, and conducting more than 25 interviews with Armenian officials, as well as Armenian and foreign experts focusing on the region. Executive Summary The 2020 Nagorno-Karabakh War, the onset of the Russia-Ukraine War in 2022, and Azerbaijan’s military takeover of Nagorno-Karabakh in 2023 disrupted the regional status quo. In light of the repeated incursions by Azerbaijan and in the absence of a tangible response from Russia and the Collective Security Treaty Organization, the Armenian government intensified its foreign policy diversification efforts. It sought to deepen diplomatic and military cooperation with new and existing partners, notably India, France, the EU, and the US, while opening multiple embassies worldwide. Deepening Diversification for Greater Deterrence: Recommendations

The expert opinion was originally published by Rondeli Foundation. Executive Summary Russia’s advances in Ukraine in 2024 and the first months of 2025, coupled with the new US administration’s decision to enter direct negotiations with Russia to end the war, have increased the likelihood that Russia, in the short- to mid-term, will expand its influence in the post-Soviet space, including the South Caucasus.The United States’ shifting focus from Europe to Asia–Pacific, diverging policy views between Washington and Brussels, and the socioeconomic challenges European Union member states face will likely diminish the role of the United States and the EU in the region.Meanwhile, ad hoc partnerships and minilateral groupings prioritizing regionalism prevail over larger, more formal multilateral coalitions.Armenia can only adapt its foreign policy in 2025 to the evolving regional geopolitical landscape and the looming risk of regional instability. The primary goals of Armenian foreign policy should be: This approach will allow Armenia to safeguard its sovereignty, navigate shifting power dynamics, and seize emerging opportunities while minimizing the risk of antagonizing regional and global powers.

In January 2025, Russia and Iran signed a 20-year Treaty on Comprehensive Strategic Partnership, encompassing the political, economic, and military sectors and potentially reshaping the dynamics of power and influence in the South Caucasus. The agreement, unprecedented in scope, underscores Moscow and Tehran’s growing alignment amid shifting global alliances. Its significance extends beyond bilateral relations, carrying profound geopolitical consequences for the region. The treaty focuses on deepening economic and security ties. Sanctioned Moscow and Tehran have found common ground in forging alternative trade routes, circumventing Western financial systems, and reinforcing military cooperation. The South Caucasus, a historically contested space where Russian, Turkish, and Persian influences have long competed for dominance, is a natural focal point of this evolving partnership. Global Dimension: Toward a Common Vision Proponents of the liberal paradigm in international relations might interpret the growing partnership between Russia and Iran as a strategic alignment of authoritarian regimes aiming to challenge and undermine the liberal democratic order. In contrast, realist theorists could view this relationship as a pragmatic coalition motivated by mutual survival imperatives in a context marked by geopolitical instability and shifting power dynamics. Beyond theoretical interpretations, the realities of Moscow and Tehran’s strategic calculus suggest a more nuanced picture. Despite the grand rhetoric surrounding their 20-year partnership, the agreement stops short of a formal strategic alliance. Their partnership still competes in key areas—notably in the South Caucasus, where their geopolitical interests are not fully aligned, and in global energy markets, where both are sanctioned suppliers and have limited opportunities. Rather than engaging in outright rivalry, the two countries have signaled a preference for managed coordination, mutual support under Western sanctions, and an unspoken understanding not to undercut each other’s positions, including in the South Caucasus. At the heart of their rapprochement lies a shared vision of a multipolar world that limits external interference while maintaining selective engagement with global markets. This approach is neither full autarky nor complete integration. Instead, Russia and Iran seek to insulate parts of their own and neighboring regions from Western influence while remaining open to economic ties with non-Western states. Their coordinated stance is evident in Iran’s accession to major multilateral frameworks favored by Russia: full membership in the Shanghai Cooperation Organization in 2023, entry into BRICS (the 10-member intergovernmental organization containing Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates) in January 2024, and observer status in the Eurasian Economic Union by December 2024. These alignments reflect not a dramatic shift but a gradual synchronization of worldviews. Russia’s 2023 Foreign Policy Concept already outlined a vision of global order that closely mirrors Tehran’s ambitions—one in which sovereignty trumps international norms, regionalism takes precedence over global governance, and Western-led institutions are seen as illegitimate arbiters of international affairs. While neither Moscow nor Tehran seeks total isolation, their partnership signals a broader trend: the consolidation of an alternative geopolitical ecosystem that challenges Western dominance not through open confrontation but through strategic circumvention and parallel institutions. Whether this axis proves resilient or a temporary alignment of convenience will depend on how effectively they navigate their underlying frictions—and how the broader geopolitical landscape evolves in the years ahead. Regional Dimension: South Caucasus as a Strategic Artery and Zone of Interest Russia and Iran’s strategic partnership has clear implications for the South Caucasus, a region they view through three primary lenses: economic, energy, and political. The International North–South Transport Corridor is at the heart of their economic ambitions—a long-envisioned trade route linking Russia to the Persian Gulf and beyond. The Western segment of this route runs through the South Caucasus, with Azerbaijan serving as the crucial transit point. However, a key missing link remains: the 162-kilometer Resht–Astara railway in northern Iran. Moscow has already committed substantial resources to this effort. In 2023, Russia allocated a €1.3 billion intergovernmental loan to finance the railway’s completion connecting Iran to Russia through Azerbaijan. In 2024, a high-level Russian delegation led by deputy prime ministers visited Tehran to reaffirm commitments to the project. Among them was Vitaly Savelyev, appointed in 2024 as the Kremlin’s special representative for INSTC development. His front-row presence at a meeting between Russian President Vladimir Putin and Iranian President Masoud Pezeshkian underscored the initiative’s strategic weight for Moscow. The treaty between Russia and Iran highlights the importance of “seamless” transportation along these corridors, but achieving this goal requires overcoming several technical and logistical limitations. Two key issues stand out: first, as mentioned above, completing the Resht–Astara railway by its planned 2028 deadline and integrating Russia’s 1,520-mm rail gauge with Iran’s 1,435-mm gauge, which aligns with European standards; second, electrifying key sections of the route to enhance efficiency. For Moscow and Tehran, the South Caucasus is not merely a transit zone but a vital artery for breaking out of isolation and expanding access to markets. Any regional instability due to unresolved conflicts directly threatens their ambitions. The level of diplomatic and financial investments they have committed suggests a determination to safeguard these routes at all costs. For Armenia, Azerbaijan, and neighboring states, this intensifying Russian-Iranian coordination presents both opportunities and challenges, as regional connectivity is increasingly shaped by the geopolitical calculations of two sanctioned powers seeking alternative economic lifelines. Another crucial common interest for Russia and Iran in the region is energy. After signing the agreement, the parties finalized the route of a planned gas pipeline from Russia to Iran, which will pass through Azerbaijan. According to this agreement, initial capacity is expected to be modest, at about 2 billion cubic meters per year, but it envisions an eventual expansion to 55 billion cubic meters. The agreement carries several strategic implications. First, Iran’s largest gas reserves are concentrated in the south, yet the country’s northern regions still require steady supplies. Moscow may already deliver small volumes of gas to Iran through existing connecting pipelines in Azerbaijan. Swap arrangements could also become relevant in this context. Second, the long-term potential of such a high-capacity pipeline raises the prospect of Russian gas reaching the Indian market. The

The special report was originally published on ORF website. Introduction The South Caucasus is an important Eurasian political and economic hub, as its transport networks have the potential to facilitate travel across the continent. Control over the South Caucasus grants access to the Black Sea and the Caspian Sea basin, serving as a gateway to Central Asia and the Greater Middle East. Given its strategic importance, regional powers such as Russia, Türkiye, and Iran have vied for influence in the South Caucasus for centuries. In recent years, the demand for alternative transport corridors has surged amid the ongoing Ukraine war, sanctions on Russia, conflicts in the West Asia (Middle East) region, and the resulting difficulties with traditional supply routes such as the Suez Canal. Consequently, the South Caucasus has become increasingly important as a link between Asia, Europe, and Russia. At the same time, the region has experienced volatility from ethnic conflicts and wars. Russia has historically had the greatest influence among the three regional players. However, after the 2020 Nagorno-Karabakh war—which in 2023 resulted in total Azerbaijani control over the region, forced displacement of the Armenian population,[1] and the subsequent withdrawal of the Russian peacekeepers in the spring-summer of 2024[2]—Russia’s influence and its role as a security provider has declined.[3] This has resulted in a power vacuum, which several regional powers, primarily Türkiye, are striving to fill. The situation has also created favourable conditions for new players outside the region. For India, there is a unique opportunity to contribute to stability in its extended neighbourhood and to ensure its presence in the strategic communication routes that could be a game-changer in the future. Based on geopolitical considerations, India has prioritised its relations with Armenia, with which it shares interests such as connectivity projects, and common security challenges emanating from the Türkiye-Azerbaijan-Pakistan alliance. It is thus important to analyse the geopolitical rationale behind the emerging India-Armenia relationship. Armenia: An Important Partner for India India and Armenia are ancient civilisations with histories dating back millennia. Armenians’ historic role as merchants ensured trade between India, West Asia, and Europe, and the existence of a vibrant Armenian community in India dating back to the seventeenth century highlights these deep-rooted connections.[4] Armenia, like India, is a democracy,[5] and the two countries also share similarities in terms of societal and family values. Armenia is home to tens of thousands of Indian students and a growing number of labour migrants.[6] India’s vision of the world as one family (Vasudhaiva Kutumbakam) and its stance against legitimising the use of force strongly resonates with the Armenians. Despite numerous attempts at conquest and the Armenian Genocide under the Ottoman Empire, Armenians have managed to maintain their statehood in a highly hostile neighbourhood. This is particularly significant today as neighbouring Azerbaijan is an authoritarian regime that advocates for the use of force to solve conflicts.[7] Ties with countries like Armenia are important for India, as it aims to position itself as a global player and a civilisational power that brings forth its unique vision in international politics and acts as a peace broker. Armenia and India have always maintained friendly political relations. Armenia has consistently supported India’s position on the issue of Jammu and Kashmir in the United Nations (UN) and other international platforms. In turn, India supported Armenia in the UN Security Council following the September 2022 aggression by Azerbaijan.[8] Today, Armenia is the largest buyer of Indian indigenous weapons,[9] and bilateral defence cooperation is growing. Armenia’s success in this regard is also important for India to position itself as a player in the global defence market. Given the growing sectors of Armenia’s economy and its competent workforce, there is ample room to develop mutually beneficial economic ties. Armenia, the only South Caucasus member of the Eurasian Economic Union (EAEU),[10] can also act as a bridge between India and the larger Eurasian market. Given its strategic location, Armenia is a balancing factor against Turkish expansionist policies and the pan-Turkic agenda in the South Caucasus and beyond, which carry security implications similarly for India. Due to its location, Armenia can serve as an alternative transit route from India to Europe. As India aspires to be an important pillar in the future multipolar world, having access to the communication routes in this region and passing through a friendly country will be beneficial. As such, it is important for India that the South Caucasus region remains stable and that Armenia maintains its security and territorial integrity. Armenia and Azerbaijan: Power Imbalance as a Source of Regional Instability Following the full-scale war launched by Azerbaijan against the self-proclaimed Nagorno-Karabakh Republic in 2020 and the ethnic cleansing of its Armenian population in 2023,[11] Azerbaijan took control of the entire Nagorno-Karabakh region. “Azerbaijan ensured peace by war,” said President Ilham Aliyev, justifying these actions.[12] This has shifted the regional balance of power in favour of Azerbaijan. It has left Armenia’s southern regions of Syunik and Vayots Dzor vulnerable as Azerbaijan surrounds them from the east and west. This has further added to the geographic and numerical advantage that Azerbaijan already had over Armenia in terms of territory, population, and military power.[13] Azerbaijan launched the 2020 war because it had a qualitative and quantitative military advantage over Armenia and Nagorno-Karabakh after investing in its military for years. Notably, Azerbaijan now criticises India and France for supplying arms to Armenia,[14] warning that it may take “serious measures” if threatened. Both India[15] and France[16] have responded by saying it is their right to supply arms to a sovereign country. At the same time, Azerbaijan is continuing its military build-up,  steadily increasing its national security and defence budget allocation from US$1.85 billion in 2018 to US$3.77 billion in 2024.[17] In 2023, Azerbaijan increased its military spending by nearly 19.6 percent,[18] and in 2024 by 6 percent, which also includes the upgrade of its air defence systems.[19] Armenia’s 2024 defence budget is three times less, at US$1.37 billion,[20] despite increases in previous years. Azerbaijan also continues posing new territorial and other demands to Armenia pertaining to the country’s internal matters,[21] coupled with a falsification of history to