Historically sidelined as peripheral in the global grand strategies, the South Caucasus has emerged as a critical region of a shifting great power agenda. Positioned at the crossroads of Eurasia, between the Black Sea and Caspian Sea, its geostrategic relevance has surged as a consequence of global and regional unfoldings. The Russia-Ukraine war plunged the security of conventional supply chains and regular trade routes/corridors into turbulence and instability, leaving Moscow sanctioned, isolated, and with limited capacity to project power, while providing openings for both established powers and rising middle powers to seek footholds.
In parallel, the second Nagorno-Karabakh conflict transformed regional power dynamics, reshaping the balance of power among local and external forces. The complex interplay of these factors produced an equilibrium environment for an alternative order characterized by multipolarity and asynchronous, non-aligned competition, drawing multiple regional and extra-regional actors, including China, India, Turkey, Russia, Iran, and the United States, to pursue overlapping and competing spheres of influence. In fact, the active interests of great powers in trade and logistical routes drive this fierce geoeconomic and commercial competition.
This emerging power vacuum created a stack of opportunities for new entrants, particularly India and France in the defense industry, and China in infrastructure and investment. Armenia diversified its security and military partnerships, while Azerbaijan and Georgia leveraged Chinese and Turkish reconstruction investments. The resulting state of affairs reflects a multi-vector South Caucasus, with India and China engaged in a quiet strategic rivalry, Turkey and Pakistan consolidating the “Three Brothers” axis with Azerbaijan, Iran pursuing pragmatic hedging, and the United States actively mediating and investing in corridor projects.
Drivers of Strategic Drift: Regional Geopolitics and Shifting Power Balances
The series of Nagorno-Karabakh conflicts exposed the fragility of fragmented security frameworks and regional power structures. Azerbaijan, equipped with advanced Turkish and Israeli high-tech weaponry and diverse, comprehensive modern warfare innovations, operatively reclaimed key disputed territories, successfully emerging as a powerful regional actor. Armenia’s historical overdependence on Moscow, which accounted for over 90 percent of its major arms imports between 2011 and 2020, proved to be functionally and strategically insufficient. Even with Russian troops stationed in Gyumri, the exclusive security guarantees fell short; while they offered a measure of symbolic reassurance, they were unable to prevent significant territorial losses and decisive setbacks during the historic conflict.
In addition, the war in Ukraine snapped the Northern Corridor, a vital artery between China and Europe. Sanctions on Russia compelled Beijing to pivot toward the Middle Corridor, traversing Central Asia, the Caspian Sea, and the South Caucasus. The freight tonnage on this route surged by 86 percent in 2023 to over 2.8 million tonnes, and exports via the Northern Corridor dropped by 56 percent. Except for the latter, proactive efforts by India in promoting the International North-South Transport Corridor (INSTC) have linked New Delhi to Russia and Europe through Iran and the South Caucasus, bypassing volatile or politically sensitive routes through Pakistan, Afghanistan, or the Suez Canal. These shifts helped fortify the strategic and economic importance of the South Caucasus as a hub for connectivity and transit.
Beyond commercial value, the INSTC corridor reconfigures regional power struggles: Armenia’s geoeconomic involvement increases its strategic relevance, Azerbaijan facilitates logistics and financing, and Iran provides an alternative, cost-effective, and time-efficient access to maritime chokepoints. Regional actors perceive the INSTC variably – Azerbaijan sees transactional and logistical benefits, Iran hedges to maintain leverage, and Russia tolerates the Indian presence as a stabilizing actor in a corridor that partially bypasses Moscow-controlled energy and transportation routes.
Apart from the aforementioned, the Zangezur Corridor, connecting Azerbaijan to Nakhchivan across Armenia’s Syunik province, gained U.S. involvement under the Trump administration, when a trilateral meeting hosted between the Armenian and Azerbaijani presidents formalized Washington’s functional role, anchored by American private investment to integrate operational oversight, security guarantees, trade, infrastructure, and defense considerations. The TRIPP initiative provides both strategic and symbolic reassurance for Armenia and passive operational assistance for India, as it provides an agile maneuver for the U.S. to reposition to situational regional partners, subtly countering China’s growing presence and indirectly competing with Russia in areas of connectivity and reach. Beijing monitors the development of the corridor to protect its Belt and Road Initiative expenditures, while Moscow, with its compromised position, navigates cautiously, recognizing that the project encroaches upon traditional Russian coercion leverage already eroded in the South Caucasus.
Regional and Extra-Regional Actors: Strategic Chessboard
In recent years, the South Caucasus has attracted growing interest from China and India, whose presence exerts a discernible effect on power balances with distinct but complementary strategies. As both sides are generally welcomed by local states and cautiously observed by established actors such as Iran, Turkey, and Russia, the reality of their involvement is more intricate. While in Indo-Pacific and the Indian Ocean, China and India have openly competitive relations through military posturing, in the Caucasus, their competition has been clearly indirect. It occurs through infrastructure investments, trade initiatives, corridor projects, and far-reaching security and diplomatic alignments, creating an understated yet significant contest for influence across the region.
Indian involvement in the South Caucasus is evident through a carefully calibrated foreign policy that balances multiple strategic vectors. Rather than heavily relying on a single form of influence, New Delhi blends defense cooperation with Armenia, selective economic investments across Azerbaijan and Georgia, and active participation in regional connectivity and logistics initiatives. To this end, India avers leveraging corridor-centric options like the Middle Corridor and IMEEC, alongside the International North-South Transport Corridor (INSTC), and locates itself within both the economic and strategic architecture of Eurasia. These initiatives serve less as immediate power projection and more as long-term footholds combining instrumental soft power leverages, allowing India to cultivate strategic ties, hedge against regional risks of uncertainties, and contribute to shaping emerging patterns of power balance across a landscape of shifting alliances and multipolar contestation.
India’s strategic ties with Armenia are multidimensional. Since 2020, defense contracts worth over $600 million have included Pinaka rocket launchers, ATAGS artillery systems, Swathi radars, anti-tank missiles, armored vehicles, and drones. These acquisitions critically strengthen Armenia’s autonomy and signal India’s capacity as a credible defense exporter.
Diplomatically, India and Armenia align on core international issues: Armenia supports India on Kashmir, while India backs Armenia’s position on Nagorno-Karabakh. Economically, bilateral trade has reached $400 million, including pharmaceuticals, IT, and agriculture, with potential expansion into high-tech sectors. India also engages Armenia in corridor-oriented trilateral consultations with Iran, integrating Yerevan into the broader Eurasian logistic web. For India, the partnership serves as a critical hedge against the Turkey-Pakistan-Azerbaijan axis. New Delhi, in fact, also sustains pragmatic economic ties with Baku, where some 200 Indian companies operate and oil imports exceed $1.6 billion annually. India offers security and diversification in terms of hard security to Armenia and less reliance on Russia, as well as economic and multi-strategic integration channels.
China maintains a carefully calibrated presence in the South Caucasus, balancing economic and infrastructural leverage over direct hard partaking in regional security frameworks. Its investments in strategic nodes such as Georgia’s Anaklia Port and Azerbaijan’s Alat Free Economic Zone illustrate Beijing’s focus on securing critical transit corridors and enhancing connectivity for the Belt and Road Initiative. China’s economic footprint indirectly contests Indian initiatives in regional corridors, including the Trans-Caspian Middle Corridor and components of the INSTC. Beijing leverages financial incentives, development projects, and trade partnerships to maintain influence, ensuring that the region remains accessible to its logistical and commercial networks.
Meanwhile, China navigates local sensitivities carefully, balancing relations with Azerbaijan and Georgia without provoking Armenia or India, and preserving its long-standing principle of neutrality in local conflicts. This modus operandi allows Beijing to protect its strategic investments while positioning itself as an indispensable economic partner in the South Caucasus region.
Turkey projects influence in the South Caucasus through a combination of strategic alliances, economic and cultural expansion. Turkish economic engagement extends into Georgia, where investments in infrastructure, trade, and cultural initiatives consolidate its regional presence, while also employing soft power to strengthen ties with local communities. Following the Trump-hosted trilateral talks between Armenia and Azerbaijan, Turkey has cautiously pursued normalization of relations with Yerevan and actively advocated for the development of the Zangezur Corridor. Ankara maintains exceptionally close ties with Baku, reinforcing the “Three Brothers” alliance alongside Pakistan and solidifying military, economic, and diplomatic coordination.
Balancing these regional and transregional efforts, Ankara seeks not only to entrench its gatekeeper role across the South Caucasus but also to stretch its strategic reach into Central Asia. When it comes to power struggles among established regional actors, Iran, interestingly, has adopted an increasingly assertive yet ambivalent posture, facilitating economic integration, trade, and transit corridors across the region. As a strategic arbiter, Tehran simultaneously maneuvers to curb the ambitions of Turkey, India, and Azerbaijan, while ensuring it remains a pressing actor in the regional balance of power.
Georgia occupies a critical position in South Caucasus connectivity and regional balance. Historically, Tbilisi pursued a Western-oriented trajectory centered on EU and NATO integration. Yet, the reversion toward a limited and amorphous form of pragmatic multivector foreign policy agenda, reflecting contested attempts at hedging and balancing among competing powers, Georgia now struggles to maneuver and mismanages the peril of potential integration within the alternative Eurasian frameworks. This cautious deviation and misaligned approach toward a Eurasian camp carries strategic risks, as it could further erode traditional Western commitments and the existential foreign policy trajectory.
The European Union remains a major, though increasingly challenged, actor in the South Caucasus. Brussels has long sought to anchor Georgia, Armenia, and Azerbaijan through association agreements, trade liberalization, and energy partnerships under the Eastern Partnership framework. Yet recent shifts in the region’s power balance and Georgia’s ongoing recalibration complicate the EU’s leverage. For Georgia, the EU still represents its historic opportunity for Western integration aspirations, but the bloc’s fragmented internal politics, overcomplicated enlargement strategy, and limited security presence create vulnerabilities that rival powers, Russia, China, and Turkey, have been quick to exploit.
Concurrently, the EU’s recently updated Black Sea strategy emphasizes connectivity, resilience, and energy diversification, seeking to bind the South Caucasus more firmly into European markets and reduce dependence on Russian transit. Whether this pitch can counterbalance the pull of alternative Eurasian frameworks remains uncertain, particularly as local actors hedge between Brussels’ normative agenda and the material incentives offered by competing powers.
South Caucasus: Crossroads of Power and Competition
The South Caucasus today showcases a region in flux, where the old power structures no longer dominate and multiple actors compete in overlapping, often unpredictable, and diffused ways. Traditional players like Russia, Turkey, Iran, and the United States coexist with rising powers such as China and India, all navigating a landscape of reshuffling, defined by non-aligned, asynchronous strategies. Meanwhile, local states Armenia, Azerbaijan, and Georgia remain active in maneuvering and hedging with varying degrees of success between great powers, leveraging corridors, trade networks, and economic partnerships, while seeking to maintain strategic autonomy and adaptive positioning.
At last, the South Caucasus operates as a testing ground for grand strategies in a transitional multipolar world. The interplay of rising middle powers, established actors, and locally assertive states generates continuously cyclical processes of power distribution, grouping, realignments, and fragmenting strategic uncertainty. In this context, the South Caucasus is not merely a periphery but a scene of contemporary geopolitics, showcasing competing visions of order, power projection, and regionalism in practice.