Trade restrictions imposed by Russia on Armenia could have a targeted and significant impact, particularly on agricultural sectors that are most dependent on the Russian market. Although the volumes are not especially large compared with the overall economy, the concentration of the consequences in Armenia’s regions makes the restrictions socially sensitive. This was stated by former Deputy Prime Minister Vache Gabrielyan.
According to Gabrielyan, the Russian measures are particularly painful because they affect not only total export volumes but also specific production chains.
“Although these volumes are not substantial in terms of the overall economy — we are talking about approximately $500–600 million — their concentration creates a significant impact, especially for the Ararat Valley and the Armavir and Ararat regions,” he said.
Russia Remains the Main Market for Agricultural Exports
Gabrielyan said the central problem is that a significant share of Armenia’s agricultural production is exported to Russia. This includes canned goods, processed food and other products.
According to the latest data from the Statistical Committee, Armenia’s agricultural sector recorded a decline of approximately 12% in January–June 2025 compared with the same period of the previous year.
Gabrielyan believes Russian restrictions may be among the main reasons for the downturn.
“Based on an initial assessment, it can most likely be described as a consequence of the sanctions. Russia is the main market for Armenian agriculture, particularly crop production, as well as dairy products,” he said.
At the same time, the former deputy prime minister stressed that more detailed data would be needed for a final assessment. Such information is expected to become available in several months.
Exports Cannot Be Redirected Quickly
The Armenian government is attempting to redirect products originally intended for the Russian market toward other destinations, including Europe, the Middle East and Central Asia.
Gabrielyan, however, said this cannot be achieved within a short period.
“The issue is not whether the government is acting correctly or incorrectly. The issue is time. From a timing perspective, it is impossible to do this quickly,” he said.
According to Gabrielyan, even if Armenia gains additional opportunities under free trade arrangements, this alone will not solve the problem.
The absence of customs duties is not sufficient for Armenian products to enter the European market. Their competitiveness must also be assessed in terms of price, quality, production technologies and delivery costs.
“Marketing expenses, product recognition and the specific characteristics of the market must also be taken into account,” he said.
Armenian Products Lack Brand Recognition
Gabrielyan cited Armenian brandy as an example. He noted that the concept of “Armenian” had developed over many years in Russia and was associated by many consumers with brandy.
No comparable level of recognition exists in European markets.
“People in Europe simply do not know about this product, and considerable work is required to build brand recognition,” he said.
Entering new markets therefore requires more than compliance with technical and sanitary requirements. It also demands substantial investment in promotion, consumer trust and stable distribution networks.
Georgia’s Experience Shows How Difficult Replacement Can Be
Gabrielyan compared Armenia’s situation with the experience of Georgia and Azerbaijan, which have also faced restrictions in the Russian market.
He recalled that Russia banned imports of Georgian wine in 2005. The ban was lifted in 2013 following political changes.
Although Georgia attempted to develop alternative export destinations, including European markets, Russia once again remained the principal market for its wine industry.
“Georgian wines did not become widely established in Europe. Today, the Russian market continues to play an important role and, if I remember correctly, absorbs around 60–65% of Georgian wine exports. Before 2005, the figure was approximately 80%,” Gabrielyan said.
In his assessment, this example demonstrates that finding new markets remains a difficult process even over many years.
For Armenia, replacing the Russian market therefore cannot be a rapid solution, particularly for agricultural sectors whose production and logistics chains were built around Russian demand.