Diversifying trade beyond traditional markets: expert highlights opportunities in Asia and the importance of economic pragmatism

Restrictions on the presence of Armenian products in the Russian market have prompted Armenia to intensify efforts aimed at diversifying its trade and economic ties. For now, these efforts are reflected in modest steps toward Europe and are accompanied in the public sphere by discussions contrasting the markets of the European Union and the Eurasian Economic Union (EAEU), as well as debates over prioritizing one over the other. Amid this debate, however, the importance and necessity of expanding into accessible southern and eastern markets appears to be overlooked, despite the fact that such prospects could become increasingly realistic against the backdrop of a potential normalization of relations between Iran and the United States. In an effort to broaden the geographical scope of discussions on this pressing issue, Armenpress spoke with Tatevik Vardanyan, expert at the Amberd Research Center of the Armenian State University of Economics and Candidate of Economic Sciences.

– Should the diversification of Armenia’s trade and economic ties be limited to the EAEU and the EU, or should the country simultaneously deepen relations with major markets such as China and India, a process that could be facilitated by a possible resolution of the situation surrounding Iran and the restoration of normal operations along southern maritime routes?

 – Diversification of external economic relations is an important prerequisite for sustainable economic development in any country. For small and open economies such as Armenia’s, dependence on one or two markets is always risky. Therefore, Armenia’s external economic policy should be based not on an “either-or” approach but on a “both-and” principle. In other words, it is necessary to simultaneously develop relations with both traditional partners and promising new markets. Undoubtedly, new economic prospects and opportunities will emerge for Armenia if Iran, following the easing of sanctions and security-related restrictions, is able to integrate into the global economy as quickly and fully as possible. In such circumstances, Iran should be viewed not only as a market of approximately 93 million people but also as a strategic transit hub capable of connecting Armenia with the Persian Gulf, the Indian Ocean and the countries of South Asia. This, in turn, would help reduce logistics costs, shorten transportation times and increase the competitiveness of Armenian products in international markets. In this context, the markets of China and India become particularly important. According to forecasts by leading international organizations, the bulk of global economic growth in the coming decades will be generated in Asia. China remains the world’s second-largest economy and a major centre of global manufacturing, while India is one of the fastest-growing major economies. In both countries, the middle class is expanding rapidly, increasing demand for high-quality food products, beverages, healthcare, education and other services. At the same time, it is important not to overestimate the significance of market size alone. China and India are highly competitive markets where Armenia cannot compete in terms of production volume or low prices. Armenia’s advantage should be based on product quality, niche production, the Armenian country brand and high value-added goods. In other words, Armenia’s goal should not simply be to export more, but to export products that are more competitive and carry greater value. At the same time, the search for new markets should not come at the expense of traditional partners. The European Union is of strategic importance because it is a highly solvent market with demand for high value-added products and services. Therefore, Armenia’s export strategy should be based not on geopolitical choice but on economic pragmatism, simultaneously strengthening its presence in both the EAEU and the EU while gradually expanding cooperation with India, China and other rapidly developing Asian markets. Only such a multifaceted approach can enhance the competitiveness of Armenia’s economy and ensure resilience against external shocks.

– What is the current structure and statistical picture of Armenia’s trade and economic relations with India and China, both before and during the recent Iran–U.S. conflict?

– Armenia’s economic relations with China and India are currently at different stages of development, something that is clearly reflected in official statistics. In recent years, China has become one of Armenia’s most important trading partners. While Armenia’s exports to China stood at approximately USD 290 million in 2020, they had reached USD 1.1 billion by 2024, increasing nearly 3.8-fold. During the same period, imports from China rose from USD 674 million to USD 1.73 billion. As a result, bilateral trade turnover amounted to approximately USD 2.8 billion in 2024. However, when analysing these figures, it is important to pay attention to the structure behind the volumes. The increase in Armenian exports to China has largely been driven by higher exports of mining products and precious metals, while imports are dominated by machinery, equipment, electronics and industrial goods. In other words, trade volumes are growing, but the structure of exports has not yet become sufficiently diversified. This trend has continued in 2026. During January–April, China’s share in Armenia’s foreign trade turnover increased from 12.2% to 14.5%, while bilateral trade grew by 19.4% to reach USD 914.5 million. This indicates the continuing rise of China’s importance in Armenia’s foreign trade structure. The picture is different in Armenia’s trade relations with India. Although political and economic cooperation between the two countries has intensified in recent years, trade volumes remain relatively modest. In 2024, Armenia’s exports to India amounted to USD 36.4 million, while imports from India reached USD 233.5 million, bringing total trade turnover to approximately USD 270 million. Looking at the dynamics of the past five years, exports from Armenia to India have fluctuated significantly. They exceeded USD 126 million in 2021 but subsequently declined. At the same time, imports nearly tripled over the same period, rising from USD 85 million to USD 233 million. This means that imports continue to dominate Armenia’s economic relations with India, while export potential has yet to be fully realized. Therefore, it can be concluded that in the case of China, Armenia’s main challenge is not trade volume but the structure of exports, whereas in the case of India, the challenge lies in making more effective use of existing economic potential. Improvements in both directions could make a significant contribution to diversifying the geography and structure of Armenia’s exports. As for the impact of the recent Iran–U.S. crisis on these relations, official statistics do not yet fully reflect it. Foreign trade indicators typically become clearer over time. However, if tensions persist and disrupt cargo transportation through Iran, logistics costs are likely to rise, transportation times may lengthen and insurance risks could increase. This would be particularly evident in Armenian-Indian trade and economic relations, as Armenia’s shortest land route to the Indian Ocean passes through Iranian territory. Conversely, if a stable security environment emerges in the region, Armenia will gain additional opportunities not only to expand economic ties with India but also with the wider regions of South and Southeast Asia.

– To put it figuratively, could Armenian pears find demand in Japan? More broadly, how do you assess the prospects for bringing Armenian agricultural and other products to the Japanese market?

– The short answer is yes. However, success will depend not so much on the quality of the product itself as on our ability to adapt it to the requirements of the Japanese market. Japan is one of the world’s most demanding, but also one of its most solvent markets. Japanese consumers place high demands not only on product quality, but also on food safety, packaging, traceability and the reliability of supply chains. Therefore, having a good product alone is not enough to succeed in that market; it is also necessary to build trust. Armenia has a range of products that could be attractive to Japanese consumers. This includes not only fresh fruit, but, above all, processed agricultural products such as dried fruits, honey, natural juices, preserves, wine, brandy, mineral water, herbal teas and other natural products. These goods have longer shelf lives, are easier to transport and are more competitive in distant markets. However, entering the Japanese market requires addressing a number of practical challenges. These include obtaining international certification, complying with phytosanitary requirements, developing cold-chain logistics and establishing long-term partnerships with Japanese importers and distributors. Without these prerequisites, even high-quality products will struggle to reach consumers. At the same time, it is important that Armenian products be presented in Japan not merely as food products, but as goods that embody cultural and national identity. Origin, history and branding carry significant value in the Japanese market, and this is precisely where Armenia has a competitive advantage. Therefore, if we are able to combine high product quality, compliance with international standards and an effective export system, Armenian products can successfully establish themselves even in one of the world’s most demanding markets. The question is not whether Japanese consumers will be interested in Armenian products, but how effectively we can present those products and ensure their sustainable presence in that market.

– Continuing eastward, how would you assess the prospects of Armenian products entering the Korean market, including not only South Korea? 

– South Korea and North Korea cannot be viewed within the same economic framework. While South Korea is one of the world’s leading technological and industrial economies, the Democratic People’s Republic of Korea remains a closed economy operating under strict international sanctions and limited external economic ties. Consequently, the economic significance of these two directions for Armenia is fundamentally different. South Korea could be of interest to Armenia not only as an export market, but also as an investment and technology partner. The Korean market has stable demand for high-quality and safe food products, meaning that Armenian wine, brandy, dried fruits, honey, mineral water, organic agricultural products and other processed goods could find consumers there. However, success in this market also requires compliance with Korean quality and technical standards, international certification, developed logistics and a reliable network of partners. At the same time, South Korea can play an important role in the modernization of Armenia’s economy. The country is a global leader in high technologies, industrial production, agricultural technologies and logistics solutions. Cooperation in these areas could contribute not only to export growth, but also to improvements in production efficiency, processing capabilities and technological development in Armenia. The situation with North Korea is entirely different. International sanctions, limited foreign trade, difficulties in conducting financial transactions and significant political risks effectively rule out the country as a promising market for Armenian products. At this stage, practical opportunities for economic cooperation remain extremely limited, and therefore North Korea cannot be regarded as a priority destination from the perspective of Armenia’s export policy. Thus, while South Korea could become an important partner for Armenia in exports of high-value-added products, investment and technological cooperation, North Korea, under current geopolitical conditions, can hardly be considered a realistic market. Armenia’s external economic policy should focus on countries with strong purchasing power, predictable economic environments and genuine long-term cooperation opportunities.

 – Can you identify other promising destinations and markets for Armenian exports?

– I believe that the future of Armenia’s exports depends not so much on finding new markets as on securing a competitive presence within those markets. It is already evident that an export model based on one or two markets cannot ensure sustainable long-term development. Therefore, our priority should be to expand the geography of exports while preserving traditional markets and simultaneously entering new economies with high purchasing power. Naturally, the Eurasian Economic Union and the European Union will continue to be Armenia’s principal partners. However, in the coming years greater attention should also be paid to the markets of South and East Asia, as well as the Gulf countries. In these regions, the middle class is expanding, purchasing power is increasing and demand for high-quality imported products is growing, creating new opportunities for Armenian producers. At the same time, discussions about exports should not be limited to goods alone. Armenia’s competitiveness can also be significantly enhanced through the export of services. Information technologies, engineering, education and healthcare services, tourism and creative industries are sectors in which Armenia can expand its presence in international markets. However, in my view, Armenia’s principal challenge is not a lack of markets but rather the structure of its exports, which remains largely concentrated in a limited range of products and raw materials. Sustainable long-term results can only be achieved if Armenia develops its processing industries, introduces new technologies, improves product quality and establishes a recognizable “Made in Armenia” brand in international markets. Another important priority is the development of the entire export infrastructure. This is not only about production. Armenia also needs efficient logistics systems, modern warehousing facilities, international certification mechanisms, export financing and insurance instruments, as well as a more active role for economic diplomacy. Together, these elements create the environment that enables producers to maintain a sustainable presence in foreign markets. Ultimately, I believe Armenia’s export strategy should be built on three principles: diversification of markets, development of high value-added products and continuous improvement of international competitiveness. If Armenia succeeds in combining these three directions, it will not only expand the geography of its exports, but also strengthen the resilience of its economy and enhance its long-term growth potential.