Operation Sindoor: Crude oil rules India’s trade with Azerbaijan

In 2023, India imported approximately $1.227 billion worth of crude oil from Azerbaijan.

India is the third-largest buyer of Azerbaijani crude oil, and crude oil accounts for 98 percent of all exports from Azerbaijan to India. It is because of this that an immediate boycott of trade with Azerbaijan could be easier said than done, compared to a voluntary ban on Turkish products.

In 2023, India imported approximately $1.227 billion worth of crude oil from Azerbaijan. By 2024, India's crude oil imports from Azerbaijan decreased to $733.09 million, according to the United Nations Comtrade database. Despite the year-on-year decline, Azerbaijan remains an important supplier in India's diversified energy import strategy.

The Confederation of All India Traders (CAIT), the apex body representing traders across the country, called upon Indian traders and citizens to completely boycott travel to Turkey and Azerbaijan. It stated that a boycott by Indian tourists could dent sectors such as leisure, weddings, entertainment, and adventure activities in Azerbaijan.

The boycott stems from Azerbaijan’s support for Pakistan in its recent military conflict with India in the aftermath of the Pahalgam terror attack in Jammu and Kashmir. “Being in solidarity with the people of Pakistan, we express condolences to the families of the innocent victims and wish a speedy recovery to those who were injured. We call on all parties to exercise restraint and to resolve the conflict through diplomatic means,” Azerbaijan’s Ministry of Foreign Affairs said in a statement during the conflict.

Do Not Miss | IFS officer asks Indians to give up dried apricots, figs. Here's why

Tourism hit hard

Tourism is the immediate casualty in the souring ties with Azerbaijan, with travel companies, mirroring public sentiment in India, voluntarily cancelling offers and tour packages to the country.

India has reportedly emerged as the fourth-largest tourist source for Azerbaijan, after Russia, Turkiye, and Iran.

According to the Azerbaijan Tourism Board, the number of Indians visiting the country increased to 243,589 in 2024 from 4,853 in 2014. Around 1.17 lakh Indians had arrived in Azerbaijan in 2023.

"Indian travellers have expressed strong sentiments over the past one week, with bookings for Azerbaijan and Turkey decreasing by 60%, while cancellations have surged by 250% during the same period,” MakeMyTrip, India’s largest travel booking platform, said in a statement on May 14.

Must Read | After tourism, India-Turkey trade ties may take a hit

Over the years, direct flight connectivity between Delhi and Baku increased to 10 flights a week. There are 4 direct flights a week between Mumbai and Baku.

CAIT’s secretary general and member of parliament from Chandni Chowk, Praveen Khandelwal, said the average spending by an Indian tourist was 2,170 Azerbaijani Manat (AZN), which is approximately $1,276, leading to a total Indian contribution of roughly $308.6 million.

“A boycott by Indian tourists could therefore result in a direct loss of this magnitude. As Indian travellers mainly visit Azerbaijan for leisure, weddings, entertainment, and adventure activities, a large-scale decline could cause a noticeable economic slowdown in these sectors,” he said.

Oil deals

During the India Energy Week this year, the State Oil Company of the  Azerbaijan Republic (SOCAR) signed an MoU with Mangalore Refinery and Petrochemicals Limited (MRPL), and Oil and Natural Gas Corporation Limited (ONGC) for crude oil and liquefied natural gas supply chains apart from trading of petroleum products.

Besides, public sector undertaking (PSU) ONGC Videsh Ltd has invested more than US$ 1.2 billion in acquiring stakes in the Azeri-Chirag-Gunashli (ACG) oil and gas fields and the Baku-Tbilisi-Ceyhan (BTC) pipeline.

Indian exports to Azerbaijan

India’s exports to Azerbaijan stood at $86.07 million during April–February 2024–25, slightly lower than the $89.67 million recorded in 2023–24. The country accounts for just 0.02 percent of India’s total outbound shipments.

According to the State Statistical Committee of the Republic of Azerbaijan, rice remained the top Indian export, valued at $34.4 million and accounting for 80.8 percent of Azerbaijan’s total rice imports.

Smartphones were the second-largest export from India, amounting to $24.7 million and making up 16.2 percent of Azerbaijan’s smartphone imports. Aluminium oxides ranked third, with shipments worth $20.29 million, accounting for 38.6 percent of Azerbaijan’s total aluminium oxide imports.

“Drug import was in the amount of $19.6 million, accounting for 4.7 percent of Azerbaijan’s global drug import, and overall pharmaceutical products import from India was $27.7 million. Mobile phones were also one of the commodities imported from India, amounting to $11.5 million, with 12.4 percent of the total import of mobile phones in Azerbaijan,” according to the website of the Indian embassy in Baku.

Movie shoots

Another sector that could be impacted is movies. At least 30 Indian movies and advertisements have been filmed at various locations in Azerbaijan in the past few years.