Azerbaijan Increases 2025 Defense Budget amid Armenia’s Military Build-up

Azerbaijan increased its defense and national security budget for 2025 amid the extensive military buildup in neighboring Armenia.

The two nations were locked in one of the world’s most protracted conflicts from 1991 to 2020, when an open war broke out resulting in Azerbaijan reclaiming its territorial integrity and marking an end to the conflict.

Azerbaijan’s Finance Minister Samir Sharifov announced that around AZN 8.4 billion or USD 4.9 billion is projected for the next year’s defense and national security spending, surpassing this year’s forecast by AZN 1.27 billion (USD 0.75 billion).

Defense expenditures, including for defense forces, national security, border service, and other activities concerning national defense is expected to account for 20 percent of the next year’s AZN 41 billion (USD 24 billion) draft budget. 

The news about increasing the defense and national security budget came on the heels of President Ilham Aliyev’s remarks about the large-scale militarization in Armenia.

On Sunday, during a meeting with a US delegation led by Congressman August Pfluger, President Aliyev stated that Armenia's militarization and arms race pose a serious threat to regional peace and security. He noted that this military build-up is coupled with territorial claims against Azerbaijan in the Armenian Constitution.

President Aliyev elaborated that the territorial claims against Azerbaijan in the Armenian Constitution should be abandoned to pave the way for a durable peace.

Starting in November 2023, France has been supplying military hardware to Armenia, including the French-made “Bastion” multi-purpose armored personnel carriers and components of the French “ARQUUS” brand for “Bastion” under the contracts signed “for expanding bilateral cooperation”. The “Mistral” short-range surface-to-air missiles and three radar systems are also reportedly on the export list.

In August, two Boeing C-17 military transport planes of the US Air Force reportedly delivered both military equipment and personnel to Armenia. The supplies included sniper rifles, night vision devices, specialized communication tools, body armor for Armenian special forces, strike mini-drones, small-scale mines, and various other munitions.

In July, a shipment of India-manufactured military supplies reportedly reached Armenia after being transported by road through Iran, as was seen in exclusive footage obtained by the Baku-based Caliber.Az news service.

In the footage, a convoy carrying camouflaged cargo was seen moving towards Armenia through a border checkpoint in Iran.

The cargo contained military supplies delivered by India, Caliber.Az reported, citing sources. Iran acted as transit country, initially receiving the cargo at the Persian Gulf port of Bandar Abbas and then transferring it to Armenia.

According to multiple reports, Yerevan and New Delhi have signed contracts for the purchase of USD 245 million worth of Indian multiple-launch rocket systems, anti-tank rockets and ammunition, including India-made Pinaka multi-barrel rocket launcher and Akash surface-to-air missile systems.

For the coming year, Armenia has set a record-high military budget, reflecting its ongoing efforts to intensify militarization. In 2025, this figure will reach 6% of its GDP, exceeding $1.7 billion – a significant 20% increase compared to the previous year. This sharp rise in military spending underscores Yerevan’s focus on enhancing its armed forces, acquiring advanced weaponry, and modernizing its military infrastructure.

Observers suggest that this trend may escalate the regional arms race, derailing efforts to foster dialogue and cooperation.