While China struggles to consolidate its economic position in the South Caucasus, Pakistan has cemented its strategic alliance with Azerbaijan. Simultaneously, India has entered a new phase of relations with Armenia. Even though the presence of Asian powers in the region represents an opportunity for economic development, it may also entail some risks.

Asian powers have recently shown increasing interest in the South Caucasus. In particular, Pakistan and India have stepped into the region, joining and partially balancing China's strong presence. Several factors have contributed to the entrance of these new Asian players and this is particularly true regarding the new balance of power established by the 2020 war between Armenia and Azerbaijan. At the same time, the European Union and United States’ lack of engagement with the region has left more room for action by other external powers.

Azerbaijan’s decade-long balanced foreign policy between Russia and the West took a decisive turn after last year’s war in Nagorno-Karabakh, highlighted by a greater emphasis on military alignment with an increasingly assertive Turkey. Ankara and Baku also came together to shape a nucleus for tripartite configurations with countries in different parts of the globe – Pakistan being an essential one to build a solid international base for supporting Azerbaijan’s cause on the Karabakh issue.

The conversion of India and Pakistan into full members of the Shanghai Cooperation Organisation (SCO) during the summit in Tashkent highlights the importance of the stabilisation of the wider Asian region. This will be the organisation's first ever enlargement since its inception in 2001 when Uzbekistan, having no direct border with China, was impressed by the Shanghai Five's performance in reducing conflict potential along China’s border with the Central Asian states. Having observed the organisation's growing potential Uzbekistan chose to join. At this point the the group changed its name to the SCO and outlined principles that would shape their fair and mutually beneficial cooperation. The chief principle was the status of partners. Introducing equality to the region, formerly dominated by Russian-led blocs, critically separated the SCO from any other organisation.