Jaishankar in Baku: Can trade and connectivity help Azerbaijan reset ties with India after Operation Sindoor fallout?

The visit aimed to reopen regular diplomatic engagement after India-Azerbaijan relations deteriorated following the May 2025 India-Pakistan conflict. Jaishankar’s talks with Azerbaijani Foreign Minister Jeyhun Bayramov were intended to create a practical path towards better relations. This matters because political tensions had affected cooperation, tourism and public sentiment.

The clearest mechanism was broader economic and strategic coordination. The ministers discussed trade, investment and energy, where their economies could complement each other. They also agreed to coordinate more closely on the International North-South Transport Corridor, which could connect India more effectively with markets across Eurasia. Jaishankar also thanked Azerbaijan for helping Indian nationals evacuated from Iran.

The visit did not erase disagreements, including Azerbaijan’s support for Pakistan and India’s defence partnership with Armenia. However, both sides identified concrete areas for rebuilding trust. More trade, energy cooperation, transport links, professional exchanges and security dialogue could gradually restore bilateral engagement.

Relations became strained because Azerbaijan supported Pakistan after India carried out military strikes during Operation Sindoor. That position created diplomatic friction with New Delhi after the India-Pakistan conflict in May 2025. The disagreement also spilled beyond official channels, prompting Indian citizens to boycott travel to Azerbaijan and contributing to a fall in tourist arrivals.

A second pressure point was India’s expanding defence partnership with Armenia. Azerbaijan and Armenia have longstanding tensions, so closer Indian-Armenian defence ties became another source of bilateral unease. These political and security disagreements made it harder for India and Azerbaijan to sustain their earlier engagement in tourism, diplomacy and other areas.

Jaishankar’s visit shows that both governments now want to manage the damage rather than allow it to define the relationship. They discussed economic cooperation, energy, connectivity, terrorism and shared security challenges. The visit began a possible repair process, but the article indicates that the underlying political sensitivities remain.

India and Azerbaijan had $401 million in bilateral trade in 2025. India exported goods worth $226 million, while imports from Azerbaijan reached $175 million. The figures show a meaningful but still concentrated economic relationship. Trade offers both countries a practical channel for engagement while political relations recover.

The main trade pattern is clear. India sells more to Azerbaijan than it buys, while Azerbaijan’s exports to India largely consist of crude oil. Energy therefore gives the relationship particular weight. The two governments also discussed expanding cooperation into investment and other sectors, rather than relying mainly on a limited range of goods.

The current relationship has room to grow, according to Jaishankar. He pointed to complementary economies and scope for more trade and investment. If diplomatic engagement improves, energy deals, investment and wider commercial exchanges could make the partnership more balanced and resilient. The article gives no broader commodity breakdown beyond these main figures.

The International North-South Transport Corridor, or INSTC, is a connectivity initiative linking India with markets across Eurasia. The article presents it as an important shared project for India and Azerbaijan. Its value lies in improving the movement of goods between India and northern or western Eurasian destinations, making trade routes more useful and potentially more efficient.

The mechanism is closer coordination between the two countries. Azerbaijan sits on the Caspian Sea and has historically been a crossroads between Asia and Europe. Working together on the corridor can help align transport connections, logistics and commercial access. The article does not provide a detailed route map, but it identifies the INSTC as a way for India to gain greater access to Eurasian markets.

Both governments agreed to coordinate more closely on the initiative during Jaishankar’s visit. That commitment adds a practical dimension to the diplomatic reset. Stronger corridor cooperation could support trade and investment, while also giving the relationship a shared long-term project despite continuing political disagreements.

Azerbaijan’s energy sector is highly important to India because Indian state-owned ONGC Videsh Ltd has invested more than $1.2 billion there. OVL holds interests in the Azeri-Chirag-Gunashli oil and gas fields and the associated Baku-Tbilisi-Ceyhan pipeline. These assets make energy a substantial and continuing foundation of bilateral ties.

In November 2024, OVL bought an additional 0.615% participating interest in ACG from Norway’s Equinor for $60 million. It also acquired a 0.737% stake in the BTC pipeline. The purchases raised OVL’s holdings to 2.925% in ACG and 3.097% in the pipeline, deepening India’s direct participation in Azerbaijan’s energy infrastructure.

Jaishankar said the countries agreed to deepen cooperation in oil and energy while expanding into other sectors. These existing investments create a strong reason to preserve communication even during political disputes. They also give future diplomatic engagement a concrete economic base, although the article does not quantify current energy revenues for India.

When direct flights decline and people stop supporting travel, tourism loses visitors and businesses lose convenient access to customers, partners and employees. People-to-people ties also weaken because fewer students, professionals, families and tourists can meet. The effects can reinforce political tension, especially when travel decisions are driven by public anger over a diplomatic dispute.

The article gives a clear example. Indian arrivals in Azerbaijan rose from 4,853 in 2014 to 243,589 in 2024, then fell to approximately 166,944 in 2025 after Azerbaijan backed Pakistan. IndiGo suspended seven weekly Delhi-Baku flights in January 2026, while Azerbaijan Airlines continued direct services. Fewer seats and a boycott reduced the normal flow of visitors.

The decline is not necessarily permanent. India and Azerbaijan discussed increasing flight frequencies, and Air India announced a codeshare partnership with Azerbaijan Airlines in August 2026. Better air links could support tourism, business travel and wider exchanges, but public confidence must also recover for those connections to fully return.

Trade, energy links and transport corridors can separate practical cooperation from political disagreement. They create shared interests, income and institutional contact, giving governments reasons to maintain communication even when they disagree on security or foreign policy. Such links do not remove tensions, but they can provide a stable foundation for managing them.

India and Azerbaijan illustrate this mechanism. Their trade reached $401 million in 2025, India’s OVL has invested more than $1.2 billion in Azerbaijani oil fields and pipelines, and both countries support the INSTC. These relationships involve companies, transport networks and long-term investments. Disrupting them would carry practical costs, so continued dialogue becomes valuable.

Jaishankar and Bayramov used these areas to reopen engagement after the Operation Sindoor fallout. They discussed trade, investment, energy and transport while also addressing terrorism and security. Better air links, professional exchanges and energy cooperation could gradually rebuild contact. The approach offers a path forward, although political disagreements and public reactions remain important obstacles.