India’s key partner in Central Asia – Uzbekistan – has been maintaining stable economic growth and the re-election of President Shavkat Mirziyoyev has provided tremendous opportunities for prospective Indian investors in the resource rich country.
Several sectors in Uzbekistan are open to foreign investments and India is one of the sought after partners. Regular flights between Delhi and Tashkent could further contribute to growth momentum of the Uzbek economy. Political stability of Uzbekistan coupled with predictable policies could be point of attraction for Indian investors.
India and Uzbekistan signed a Joint Statement in September 2019 to set up a joint feasibility study for entering into negotiations for a Preferential Trade Agreement (PTA). It is hoped that PTA could be signed soon and that would open up India’s entry into Kyrgyzstan as well as Tajikistan. Notable Indian investments in Uzbekistanby Indian companies include those in the field of pharmaceuticals, amusement parks, automobile components, and hospitality industry. Indian majors like GMR have expressed interest in investment in airports, development of air corridor, Navoi cargo complex in Uzbekistan; KDAH (Ambani Hospital) from Mumbai has expressed interest in setting up a specialty hospital. Investments in various fields, including pharma and healthcare, textiles and auto components, agriculture and food processing, and mining and jewellery sector are in various stages of discussion. In the field of education in October 2019, AmityUniversity and Sharda University opened campuses in Tashkent and Andijan respectively. Indian institutions like iCreate are actively cooperating with Uzbek counterparts for promoting start-up ecosystems in Uzbekistan and training entrepreneurs in setting up incubators. Indian companies like Dev IT have entered into bilateral cooperation in field research, technologies, start- ups and innovations with budding Uzbek partners. India’s National Thermal Power Corporation is also participating in various tenders including solar PV power plants and consultancy assignment for gas projects in Uzbekistan. India and Uzbekistan have set up National Coordination Committees to oversee the implementation of mutually agreed projects and initiatives.India has granted market access for lemon and melon from Uzbekistan. Pest Risk Analysis (PRA) for plum and sweet cherries have been completed and is further under process. Uzbekistan has granted market access for banana and mango from India. PRA for Soyabean oil cake has been completed and additional information has been sought. Request for PRA from India include wheat, wheat flour, potato, pomegranate and pomegranate seeds.Indian investors can get further impetus from the fact that Uzbekistan has maintained high growth dynamics during the first half of the year despite an unstable external environment. Uzbekistan’s economy is expected to maintain stability through the year and is expecting higher investments from India. Today Uzbekistan provides predictable financial environment and friendly people besides regular connectivity to further promote business ties. Inflation in Uzbekistan continues to slow down. In January-June, prices increased by 3.5%, while in the same period in 2022 by 6.5%. In annual terms, inflation slowed to 9% (in June 2022 – 12.2%). Food inflation slowed from 8.9% in January-June 2022 to 4.1% over the same period this year. Similarly, the growth of prices for non-food products slowed from 5.8% to 3.1%, for paid services from 3.3% to 2.9%, according to official data. Investments from centralized sources in the first half of the year increased by 2.4%, in particular, at the expense of budget funds by 3.6%. Foreign investments and loans guaranteed by the government increased by 6.9%. Industrial production in the first six months of this year grew at a faster pace compared to the same period in 2022 – 5.6% versus 5.1%, respectively.The main factors of economic growth are due to the timely adoption of urgent measures to support entrepreneurs, as a result of which the growth of the manufacturing industry amounted to 6.3% (5.9% for the first half of 2022), the mining industry by 0.2% (-0.5%).In agriculture, in particular in crop production and animal husbandry, there is an acceleration in the growth rate of output to 3.8% (in January-June 2022 – 2.7%). Foreign trade turnover in the 1st half of the year increased by 19.4% to $29.2 billion. Exports increased by 23% to $12.1 billion, imports by 17% to $17 billion.
The export growth is due to an increase in the supply of machinery and transport equipment to foreign markets by almost 60%, gold by 47%, services by 41%, food by 33%, various finished products by 25%. At the same time, exports of non-food raw materials decreased by 26%, fuel and energy resources by 20%.
