Exploring Azerbaijan's Import Profile: Trade Insights

Azerbaijan's imports include iron and steel, machinery, and food and beverages, particularly meat and milk. In 2023, Azerbaijan's merchandise imports totalled $17.2 billion, an increase of 18.8% compared to 2022. The top import commodities were motor vehicles, mineral fuels, electrical machinery, and pharmaceutical products. The country's main import partners are Russia, Turkey, China, Germany, and the USA.

Cars and other vehicles

Azerbaijan's economy is growing, and so is its automotive sector. The country imported $1.51 billion worth of motor cars and other motor vehicles in 2023, accounting for 8.77% of its total imports that year. Most of the cars imported into Azerbaijan are from Europe and Asia.

Importing Vehicles to Azerbaijan

The import of vehicles to Azerbaijan is overseen by the Customs Department of Motor Transport of the State Customs Committee. The State Traffic Police Department is also involved in the process, issuing licence plates and registration cards.

Regulations

Right-hand drive vehicles and those that do not meet the Euro 3 emissions standard cannot be imported into Azerbaijan. In addition, vehicles with tinted windows are banned. All imported cars must have ABS and at least one airbag, and they should conform to Euro 4 emission standards or above.

Temporary vs Permanent Imports

Cars and motorcycles imported on a temporary basis (less than two years) are exempt from import duty and tax. However, customs charge a fee of between 0.18% and 0.30% of the vehicle's invoice value. The owner must also pay a refundable deposit, which is returned after customs inspect the car upon leaving the country.

For permanent imports, customs duties and taxes must be paid in full. This includes the customs fee, VAT (currently at 18%), and road taxes.

Shipping Methods

There are three primary ways to ship a vehicle to Azerbaijan: Roll-On Roll-Off (Ro-Ro), Container Shipping, and Air Cargo Shipping. Ro-Ro shipping is the most efficient and cost-effective method, while Air Cargo Shipping is the quickest and most expensive option.

Costs

The cost of importing a car to Azerbaijan varies depending on factors such as distance, type of vehicle, and shipping method. On average, it costs around $2,300 to ship a car from the US to Azerbaijan. In addition to shipping costs, taxes and duties can add up to 20-30% of the car's value, plus VAT and customs fees.

Petroleum and mineral fuels

Azerbaijan's importance as a global mineral producer is largely based on its petroleum extraction industry. The country has been a significant oil producer for over a century, and its oil and gas reserves are its major mineral wealth. In 2023, mineral fuels, mineral oils, and products of their distillation, including crude petroleum, petroleum gases, and refined petroleum, accounted for 11.4% of Azerbaijan's imports, valued at $1.98 billion.

Azerbaijan's focus has recently shifted to developing offshore resources in the Caspian Sea, with foreign direct investment revitalizing the oil sector through the development of large-scale new projects and the refurbishment of older ones. The country's proven crude oil reserves are estimated to range from 7 billion to 13 billion barrels, with the State Oil Company of the Azerbaijan Republic (SOCAR) providing a higher estimate of 17.5 billion barrels. These reserves are expected to be the country's primary source of revenue for the coming decades.

In 2023, Azerbaijan imported $410 million worth of crude petroleum, making it one of the country's top imports. Additionally, the country imported $530 million worth of petroleum oils and oils obtained from bituminous minerals, not crude, and $303 million worth of wheat and meslin. These imports contribute to Azerbaijan's status as a significant oil producer and reflect the country's focus on developing its petroleum industry.

The country's main import partners for mineral fuels, mineral oils, and products of their distillation include Russia, China, Turkey, Germany, the USA, Turkmenistan, Italy, Iran, Japan, and Korea. These imports support Azerbaijan's energy sector and contribute to its position as a notable player in the global petroleum market.

Wheat and other cereals

Azerbaijan's imports of wheat and other cereals are a significant part of the country's overall import structure. In 2023, cereals accounted for 2.25% of the total value of merchandise imports, equivalent to approximately $390 million. This makes Azerbaijan the 47th largest importer of wheat in the world.

The country's primary sources of wheat imports are Russia, Kazakhstan, Turkey, Austria, and India. In the first three quarters of 2023, 81% of wheat imports came from Russia, with Kazakhstan supplying 19%. However, due to the war in Ukraine, there is uncertainty regarding prices and supply. Russia imposed a temporary ban on the export of durum wheat from December 1, 2023, to May 31, 2024, and established a tariff quota for the export of major grains, including wheat, barley, corn, and rye.

Azerbaijan's dependence on wheat imports from Russia creates a significant risk, and experts recommend increasing domestic wheat production or diversifying sources of imports. The country's agricultural policy emphasizes import substitution in grain production, and steps have been taken to improve irrigation methods, expand the use of modern pesticides and herbicides, and increase access to fertilizers.

In addition to wheat, Azerbaijan also imports other cereals such as barley, corn, and rye. The country's overall imports of cereals are driven by its need to ensure food security and meet domestic consumption demands.

Packaged medicaments and pharmaceuticals

Azerbaijan has a list of prohibited narcotic drugs, psychotropic substances, and precursors. The import of these substances to the Azerbaijan Republic under other names, as well as all their salts and compounds, is prohibited. Narcotic drugs on this list include:

• Alpha-methylfentanyl
• Alpha-methylthiofentanyl
• Acetyldihydrocodeine
• Beta-hydroxy-3-methylfentanyl
• Hydromorphine-N-oxide
• Moramid intermediate
• Pethidine intermediate A, B, and C

Psychotropic substances on this list include:

• (+)-Lizerqid LRD LSD-25
• Tetrahydrocannabinol
• Rasemat metamphetamine

Precursors on this list include:

• 3, 4 methylendioxyphenile 2-propanon
• N-acetylanthranyl acid

In addition to these prohibited substances, Azerbaijan also has a list of restricted substances. Narcotic drugs on this list include:

• Butorphanol (stadol)
• Ethylmorphine hydrochloride (dionine)
• Methylmorpine (codeine) (in the composition of other pharmaceutical products of compound composition that is not controlled)
• Methylmorphine phosphate (codeine phosphate)
• Morphine hydrochloride
• Pritramid (dipidolor)
• Propanidid (sombrevin)
• Trimeperidin (promedol)

Psychotropic substances on this list include:

Phenobarbital (in the composition of other pharmaceutical products of compound composition that is not restricted and controlled)

Precursors on this list include:

Efedrin (kq) (in the composition of other pharmaceutical products of compound composition that is not controlled)

Regarding packaged medicaments and pharmaceuticals, Azerbaijan has a pharmaceutical industry that includes pharmaceutical companies, suppliers, manufacturers, exporters, and importers. However, specific data on the import of packaged medicaments and pharmaceuticals into Azerbaijan is limited.

In general, importers into Azerbaijan are required to provide the State Customs Committee with documentation, including a signed import contract, customs declaration, bill of lading, sales invoice, packing list, certificate of origin, and certificate of quality for the imported merchandise. Goods imported for processing and re-export are subject to normal duties and taxes, and a drawback procedure can be initiated to recover these costs upon re-export.

While Azerbaijan's imports of packaged medicaments and pharmaceuticals are not specified, it is worth noting that global trade in this sector is significant. In 2022, packaged medicaments were the world's 8th most traded product, with a total trade value of $460 billion. The top importers of packaged medicaments in 2022 were the United States, Switzerland, Germany, Belgium, and Italy.

Meat and milk

Azerbaijan's meat and dairy industries are closely linked to its agricultural sector. The country's meat production includes beef, mutton, and poultry, with sheep and cattle raised on the steppe contributing to both meat and dairy. Meat processing mainly takes place in Baku, Gandja, Sheki, Mingachevir, Nakhchivan, Aghdam, Imishli, Lankaran, and Xirdalan.

Azerbaijan's dairy industry is an important part of the country's diet and culture. Milk and dairy products like butter, cream, sour cream, yogurt, cottage cheese, buttermilk, and ayran are regularly consumed at various times of the day. Dairy processing plants are located across the country, including in Baku, Sumgait, Gandja, Mingachevir, Lankaran, and Shamakhi, among others.

The country's meat and dairy industries are supported by animal husbandry practices. Cattle and sheep are the main species preferred by Azerbaijanis, and they are considered the most productive livestock. Buffalo husbandry also plays a role, with Karabakh, Mil-Mugan, and Shirvan being the main regions for this activity. Cross-breeding practices have been implemented to increase dairy and meat production.

Azerbaijan's meat and dairy products are an essential part of the country's cuisine and food industry, contributing to dishes like plov, kebabs, shashlik, and soups. The country's varied climate and geographical location have influenced the development of these industries, allowing for a diverse diet rich in produce, milk products, and meat.

Frequently asked questions