Georgia at the Crossroads: Where Eastern and Western Trade Corridors Meet

As geopolitical dynamics reshape the South Caucasus, Georgia stands at a crossroads. The region’s evolving transport corridors offer both risks and transformative opportunities. Will Georgia position itself as a critical logistics hub, or be sidelined by faster-moving competitors?

Georgia’s Strategic Role in the Development of Land Transport and Logistics Corridors in the South Caucasus

In recent years, the South Caucasus has experienced major geopolitical shifts, beginning with the 2020 Armenia–Azerbaijan hostilities and accelerating further following Russia’s full-scale aggression against Ukraine. These developments have reshaped not only the region’s security architecture but also created momentum around transit corridors and regional connectivity.

Georgia’s position at the crossroads of Europe and Asia places it in a critical spot within this evolving landscape. The country’s ability to modernize its infrastructure and align with international trade flows could determine whether it becomes a key regional logistics hub or risks being bypassed.

The Post-Karabakh Shift: Strategic Transport Openings

Following the 2020 war in Nagorno-Karabakh, the trilateral agreement signed in Moscow in January 2021 between Armenia, Azerbaijan, and Russia outlined steps to restore regional transport links. Two corridors are particularly important: a Baku–Nakhchivan railway through the Zangezur region and a Yerevan–Nakhchivan rail line. These links carry strategic value for both Armenia and Azerbaijan.

Azerbaijan, in particular, has moved quickly. Construction of the 100-kilometer Horadiz–Agbend railway line, a vital part of the Zangezur Corridor, began in February 2021 and is nearing completion. In 2024 alone, Azerbaijan signed a $131.5 million contract with the Asian Development Bank to modernize the Sumgayit–Yalama rail line to Russia. Another $1.1 billion project is underway on the Alat–Astara railway near the Iranian border, expected to be completed in stages by 2028. Total investment in railway development exceeds $2 billion.

These corridors will not only improve Azerbaijan’s access to Nakhchivan and Turkey but may also become integral parts of the broader East–West and North–South transport networks, increasing economic influence across the region.

The East–West Corridor and China’s Trade Ambitions

The South Caucasus plays a growing role in trade between the European Union and China. While bilateral EU–China trade reached €739 billion in 2023 (a 14% drop from 2022), volumes rebounded in 2024 with 1.6% growth, totalling around €706 billion. As demand for diversified and stable transit grows, the East–West Corridor through Georgia and Azerbaijan becomes more relevant.

The Middle Corridor, connecting China through Central Asia, the Caspian Sea, the South Caucasus, and onward to Europe, is increasingly important. Azerbaijan’s support for China’s Belt and Road Initiative, combined with major rail and port upgrades, signals a shift toward a more coordinated regional logistics strategy.

The Zangezur Corridor is expected to reduce transit times and create a direct route between Turkey and Central Asia. Armenia, if integrated as a transit country, could also benefit from increased trade flows.

Georgia’s Infrastructure: Progress and Gaps

Georgia is involved in several international corridors including TRACECA, the Trans-Caspian International Transport Route, the Lapis Lazuli Route, and the Persian Gulf–Black Sea Corridor. Yet despite its inclusion in these networks, Georgia faces significant gaps in infrastructure.

The Georgian Railway Modernization Project, launched in 2011 at an estimated $400 million, remains incomplete. A 2018 MoU with Swiss firm Stadler to build a train factory in Georgia has not materialized. Passenger rail services remain limited outside the Batumi line, and rail traffic in regions has decreased since the pandemic.

In contrast, Azerbaijan has introduced modern Stadler trains, discontinued old rolling stock, and carried over 8 million passengers in 2024. Georgian Railways moved four times fewer passengers in the same year.

The 2021–2030 National Logistics Strategy of Georgia outlines steps to improve road, rail, and maritime infrastructure but implementation has been slow.

Maritime Connectivity and Port Development

Port infrastructure also presents a mixed picture. The Anaklia Deep Sea Port project, which could transform Georgia’s Black Sea capabilities, has seen multiple delays. Poti and Batumi ports suffer from weather-related unpredictability, lack of deep-water capacity, and high ferry costs. Expanding Georgia’s maritime capacity remains essential for competing with alternative corridors.

External Pressures and Regional Competition

Russia has expressed interest in reviving the North–South railway through occupied Abkhazia to reach Armenia. Tbilisi has rejected this plan due to security and sovereignty concerns. Armenia, while currently dependent on Georgian routes, is exploring alternatives via Turkish ports or direct links through Azerbaijan, though these depend on further normalization with Turkey and Azerbaijan.

Despite this, Georgia remains the most reliable land bridge between Central Asia and Europe. Still, failure to modernize infrastructure risks reducing its role in favour of faster and better-funded alternatives.

Georgia’s Opportunity in a Shifting Global Trade Order

With rising attention on Eurasian connectivity, Georgia must align its infrastructure and regulatory systems with global demands. Initiatives like China’s Belt and Road (estimated at $600 billion) and the EU’s Global Gateway or the G7-backed Build Back Better World (targeting $40 trillion in infrastructure funding for developing countries by 2035) represent global tools Georgia should integrate with.

Conclusion: What’s Next for Georgia?

For Georgia to secure its role in regional transport and logistics, it must act decisively. Key priorities include:

• Finalizing Georgian Railway modernization and upgrading rolling stock

• Accelerating the Anaklia Deep Sea Port project

• Improving capacity at Poti and Batumi ports

• Strengthening East–West highway and airport freight infrastructure

• Enhancing cyber and physical security for critical infrastructure

• Coordinating more closely with Azerbaijan, Central Asia, and European partners

• Developing a modern logistics and trade policy aligned with digital transit, customs integration, and global supply chain standards

The future of Georgia’s competitiveness will depend on policy vision, timely execution, and balancing regional geopolitics with global connectivity.

This is not just an infrastructure race. It is a geopolitical opportunity. Georgia must not miss it.