Light industry is represented by industries: textile (cotton, silk, knitted, woolen), carpet, leather.

All Central Asian countries have a long history the tradition of growing cotton. Therefore, cotton is the driving force behind the growth of Central Asian countries. Uzbekistan and Turkmenistan are using this to process more and more cotton fiber into yarns, fabrics, and finished products. The continuous growth of these countries over the past 20 years is impressive. Expansion of the textile and clothing industry creates jobs and wealth.

Uzbekistan   |  Kazakhstan  |  Kyrgyzstan |   Tajikistan | Turkmenistan

Uzbekistan is the fifth-largest cotton producer in the world. The textile industry of Uzbekistan plays a significant role in the country's economy. The textile industry provides one-third of jobs in the industrial sector. The production of more than one million tons of cotton fiber in Uzbekistan is rapidly increasing the volume of cotton for processing at local spinning mills. To achieve this goal, Uzbekistan has many opportunities, such as special support for the development of the textile industry by the government, the availability of vast reserves of raw materials high-quality cotton fiber, low energy costs, and a skilled labor force.

According to the President Decree dated 14.12.2017, “Uztuqimachiliksanoat” Uzbekistan Textile Industry Association was established.  Association allowed domestic textile companies to demonstrate growth dynamics. Today, the Association unites over 1,600 major manufacturers in the textile market in Uzbekistan, which accounts for a substantial part of light industry production the processing of 706 thousand tons of cotton fiber and production of 510 million square meters of fabrics of various assortment, including:

•  knitted fabric – 89 enterprises;
•  finished knitwear – 495 enterprises;
•  garments – 354 enterprises;
•  hosiery – 54 enterprises;
•  textile haberdashery – 20 enterprises.

At the same time, 300 textile companies were created with the participation of foreign investors from such countries as China, South Korea, Russia, India, Singapore, Germany, Switzerland, and others.

Association enterprises also produce other products of a wide range and specific profiles, including medical products, nonwovens, satisfying the need for wadded products, special working clothes, terry products, and ensuring the development and introduction of new generation products into production – new innovative products.

The largest increment of value-added in the chain of production of the textile industry from cotton is in the sphere of sewing knitwear and garments.

Based on the textile industry's importance for the country's economic development, Uzbekistan is implementing a Program of measures for further development of the textile, garment, and knitwear industry for 2017-2019. According to the Program, by 2020, the production of cotton yarn is planned to increase by 2.5 times, finished fabrics – by 2.8 times, silk fabrics – by 2.7 times, nonwoven materials – by 1.5 times, knitted fabric – by 2, 7 times. It is planned to increase the output of garments by 3.2 times, knitwear by 2.1 times, production of raw silk by 2.1 times. If the volume of fabrics production in 2011 amounted to 85.63 million square meters, in 2020, this figure would exceed 459.2 million square meters, ensuring growth in production by 5.4 times.

Turkmenistan has significant natural resources, and one of them is cotton. The presence of its own raw material base creates favorable conditions for the accelerated development of the textile industry. Today, more than 70 large textile enterprises provide the textile industry with a place of honor among the 3 largest export industries. Incentives such as a stable economic situation, a favorable legal climate, availability of raw materials, energy resources, and qualified personnel contribute to the development of the textile industry. The sector currently employs about 30,000 people. Vigorous efforts to revitalize this important sector and realize the potential of Turkmenistan through the optimal use of natural resources are factors that will guarantee the important role of the industry in the future.

Tajikistan has long played an important role in international trade in textile and clothing products. The growing cotton industry in Tajikistan has become the basis for the development of the textile industry. Cotton processing also became an important industry, and most of the products were sent to the countries of the former Soviet Union for further cleaning; despite this, related directions also developed. After the end of the civil war in 1997, the inflow of investments gradually returned to the textile industry. Capital expenditures were boosted by foreign direct investment (FDI), modernized assets, and cotton fabric production began to increase. In 2009, the volume of manufactured products reached 36.5 million m², more than three times compared to 1997. However, in 2014 the production volume decreased to 19.7 million m², and even the highest production level was observed in 2009.

Even though only 10% of the cotton produced in the country is processed, the quality of this cotton is high, and the price is reasonable. Given these advantages, coupled with Tajikistan's strategic location, low resource costs, and cheap labor, the country's textile industry has the potential to act as a driving force for income generation and job creation.

The government formalized its support for the industry through two important programs: the Complete Processing of Cotton Fiber (2007-2015) and the Program for the Development of Light Industry (2006-2015). The first program aims to increase the volume of cotton fiber processing to provide resources for the light industry. The latter program aimed to increase recycling and stimulate exports of textile products by introducing improvements along the entire value chain, support network, and regulatory environment. As a support to the sector, the Government has provided a 12-year tax exemption for businesses that will vertically integrate by 2015 by processing domestic cotton into finished textiles and garments.

Textile production has again become an important source of income and employment. Now, about 40 textile enterprises are operating in the country.

Investment Potentials

• An easily accessible market that will grow in the future with the development of an organized retail chain, favorable demographic indicators, rising income levels, and a change in preferences for the quality of brand products.

• Preferences and incentives for manufacturers, including exemption from tax and customs payments for up to 10 years, depending on the investment amount.

• Privatization and lease of state property on favorable terms and at low prices for foreign investors, obligated to invest funds.

• Abundance and availability of raw materials for production, such as cotton, wool, silk, jute, and artificial fibers.

• Comparative advantages in terms of skilled labor and production costs on major textile manufacturers around the world.

• State policy aimed at protecting investors’ investments and private property rights.

• The presence of the entire value chain for textile products, starting with the production of natural fibers and ending with the production of yarn, fabric, and clothing in the country, creates an advantage over countries such as Vietnam, Bangladesh, etc.