In recent years, trade relations between Georgia and Russia have shown steady growth, seemingly overcoming previous political frictions that stemmed from the 2008 conflict and the ongoing territorial issues of Abkhazia and South Ossetia. Despite these earlier challenges, it appears that economic pragmatism has helped drive increased bilateral trade, with Russia emerging as one of Georgia’s top trading partners.

Historical Context: From Embargo to Recovery

Trade relations between Georgia and Russia in the 21st century have been volatile. Following the 2008 conflict, Georgia severed its diplomatic relations with the Russian Federation, and in response, Russia imposed hefty trade restrictions. These restrictions banned or limited key exports within Georgia’s economy, such as Georgian wine and mineral water. However, as domestic political shifts occurred within Georgia, relations began to thaw in 2012. This led to Russia lifting the imposed embargo in 2013, which in turn resulted in a gradual rebound in relations. In 2019, direct flights between the two countries resumed as normal, and although there were several moments of heightened tension—mainly relating to domestic political issues within Georgia—in 2023 Russia abolished visas for Georgian nationals.

This gradual normalisation has been framed by Georgian politicians as a pragmatic strategy aimed at avoiding potential economic harm. While several domestic polls show that most Georgians are sceptical and wary of Russia’s intentions, with an estimated 69 per cent expressing this view, Georgian officials have stressed the importance of maintaining a stable relationship with Russia for Georgia’s national and economic interests. In terms of trade growth, external trade with Russia rose from 5 per cent in 2012 to 12 per cent in 2023. Notably, even after the conflict between Russia and Ukraine escalated into a full-scale war in 2022, Georgia refrained from joining Western sanctions against Russia, instead positioning itself as a neutral hub for regional commerce.

Recent Trade Trends

Data taken directly from Georgia’s National Statistics Office highlights consistent growth in bilateral trade between the two nations. In 2024, turnover reached $2.53 billion, a 5.4 per cent increase from 2023, with Georgian exports up 3.7 per cent to $681.5 million and imports up 6 per cent to $1.85 billion. This momentum continued into 2025, with full-year turnover hitting $2.69 billion, up 6.3 per cent year-on-year.

Breaking down 2025 figures:

• Exports from Georgia to Russia: $749.3 million (10.3 per cent of Georgia’s total exports), a 10.3 per cent rise from $679.6 million in 2024. Key products included wine ($170.7 million), spirits ($157.9 million), mineral waters ($71 million), and prepared fruits/nuts ($50.3 million). Russia accounted for 65 per cent of Georgia’s wine exports, underscoring its market dominance.

• Imports from Russia to Georgia: $1.94 billion (10.5 per cent of total imports), up 4.9 per cent from 2024. Dominant items were petroleum oils ($477.7 million), natural gas ($206.4 million), wheat ($102.3 million), and crude oil ($95.8 million). Gas imports are projected to double in 2025 compared to 2024 forecasts.

• Quarterly Snapshot: Early 2025 saw a dip in exports (down 19.2 per cent to $129.8 million in Q1), but recovery ensued, with overall turnover up 3.7 per cent to $642.8 million in January–March. Russia ranked as Georgia’s third-largest trading partner overall, with an 11.4 per cent share in Q1.

Georgia’s trade deficit with Russia widened to $1.19 billion in 2025, reflecting heavier reliance on imports. Russia is now Georgia’s third-largest partner after Turkey and the U.S., contributing 10.4 per cent to total trade turnover.

Drivers of Improvement

Several factors have driven this trend:

Policy Choices: Georgia’s refusal to impose sanctions on Russia has preserved access to its market, unlike many Western-aligned nations. This includes allowing Russian businesses to register in Georgia—over 2,300 in 2024 alone—and facilitating remittances from Russian migrants.

Geopolitical Shifts: The Ukraine war has boosted the Middle Corridor trade route through Georgia, enhancing transit opportunities. Russia’s need for alternative suppliers amid sanctions has increased demand for Georgian goods.

Economic Incentives: Proximity, established supply chains, and competitive pricing make Russia a natural partner. For instance, Russian wheat and energy are cheaper than alternatives, while Georgian agri-products like wine thrive in Russia’s consumer market.

People-to-People Ties: An influx of Russian nationals post-2022 has spurred local demand, and resumed flights have eased logistics.

Georgian officials emphasise these benefits, noting that trade with Russia supports jobs and growth without compromising sovereignty.

Challenges and Risks

While trade is improving quantitatively, qualitative concerns persist:

• Economic Vulnerability: Growing dependence—Russia supplies 10 per cent of imports—exposes Georgia to Kremlin leverage, such as potential embargoes. Critics warn of “hybrid state capture” mirroring Belarus.

• Political Backlash: Alignment with Russia has strained EU ties, with Georgia’s EU alignment rate dropping to 40 per cent in 2025. Protests in 2024–2025 highlighted public opposition to perceived “Russification.”

• Sanctions Evasion Allegations: Reports suggest Georgia aids in circumventing Western sanctions, prompting EU scrutiny.

Future Outlook

Looking ahead, if geopolitical stability holds between the two nations, it is clear that trade could continue to expand. This is also highly dependent on the domestic political situation in Georgia, as there are clearly two different camps of pro-EU and pro-Russian politicians.

As trade expands, there are potential opportunities in areas such as energy and agriculture. However, this is also dependent on Georgia’s other allies, including EU countries, which are currently sanctioning Russia heavily, and the United States, whose foreign policy under the current administration has demonstrated volatility.