ABOUT UZBEKISTAN

Amongst all the countries in Central Asia, Uzbekistan, officially the Republic of Uzbekistan, is a doubly landlocked nation and the most populous country in the region. Situated along the historic Silk Road, Uzbekistan boasts a rich cultural heritage, ancient cities like Samarkand and Bukhara, and is undergoing significant economic reforms aimed at opening up to foreign investment. Tashkent is the capital and largest city, serving as the country’s primary political, economic, and cultural hub. According to the World Bank, Uzbekistan is classified as a Lower-Middle Income Economy, with a strong focus on transitioning to a market-oriented economy and attracting foreign direct investment.

The currency of Uzbekistan is the Uzbekistani Som (UZS). As of today’s exchange rates (June 2025), 1 Uzbekistani Som is approximately 0.0066 Indian Rupees (or 1 Indian Rupee is approximately 151 UZS). The population of Uzbekistan is estimated at approximately 36.3 million in 2024. Uzbekistan shares land borders with Kazakhstan to the north, Kyrgyzstan and Tajikistan to the east, Afghanistan to the south, and Turkmenistan to the southwest. As a doubly landlocked country (meaning it is surrounded by landlocked countries), it does not have any direct maritime borders or access to seaports; therefore, it relies heavily on road and rail networks, particularly through neighboring countries like Kazakhstan and Turkmenistan, to connect to global trade routes. The official language is Uzbek, a Turkic language. Russian is widely understood and spoken, especially in business and government circles. English proficiency is increasing, particularly among younger generations in urban areas. The vast majority of the population practices Islam, predominantly Sunni. Major international airports include Tashkent International Airport (TAS), Samarkand International Airport (SKD), and Bukhara International Airport (BHK), providing growing air links to regional and international destinations. Uzbekistan’s strategic location also makes it a key transit corridor for goods and people in Central Asia.

The standard corporate income tax rate in Uzbekistan is 15%. To attract foreign direct investment and stimulate economic growth, the Uzbek government has implemented wide-ranging reforms and offers various investment incentives, particularly within its numerous Free Economic Zones (FEZs) and for investments in priority sectors. These incentives are primarily managed by the Ministry of Investment, Industry and Trade. Key incentives can include:

• Tax Holidays: Potential for exemptions from corporate income tax, property tax, land tax, and customs duties for specific periods (up to 10 years or more), depending on the investment amount, location (especially in FEZs), and sector.
• Customs Duty Exemptions: For the import of machinery, equipment, raw materials, and components not produced domestically, used in qualifying investment projects.
• Reduced Rates: Lower tax rates for certain types of activities or for investments in specific regions.
• Investment Protection: The government has introduced laws and mechanisms aimed at protecting foreign investments, including a modernized legal framework and the establishment of an investment ombudsman.
• Access to Infrastructure: Provision of necessary infrastructure (power, water, gas, roads) for large investment projects.

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Establishing a business in Uzbekistan has become significantly easier due to the ongoing reforms aimed at improving the business climate. The most common legal entities for foreign investors include a Limited Liability Company (LLC – Mas’uliyati Cheklangan Jamiyat), Joint Stock Company (JSC), and Representative or Branch Office. The Foreign Investment Law generally permits 100% foreign ownership in most sectors, aimed at attracting much-needed capital and expertise. The government’s commitment to market liberalization and attracting foreign investment has led to considerable improvements in ease of doing business, though navigating local regulations and bureaucracy still requires careful attention.

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Types of Business which can be started in Uzbekistan:

• Agriculture & Agro-processing: As a major producer of cotton, fruits (e.g., grapes, apples), and vegetables, opportunities exist in modernizing farming techniques, developing agro-processing industries, food packaging, and export-oriented agriculture.
• Mining & Metallurgy: Rich in natural resources including gold, uranium, copper, silver, and natural gas. Opportunities exist in exploration, extraction, and particularly in the downstream processing of metals.
• Energy Sector (Oil & Gas, Renewables): Significant natural gas reserves. Growing focus on renewable energy (solar, wind) development to meet rising energy demands and reduce reliance on fossil fuels.
• Textiles & Apparel: Leveraging its cotton production, there are significant opportunities in value-added textile manufacturing, from spinning and weaving to garment production for export.
• Tourism: With its historical Silk Road cities (Samarkand, Bukhara, Khiva), Uzbekistan has immense potential for cultural tourism. Opportunities exist in hotel development, tour operations, and related hospitality services.
• Infrastructure Development: Large-scale projects in modernizing transport networks (roads, railways, airports), energy infrastructure, and urban development.
• Information & Communication Technologies (ICT): Rapidly developing digital economy, with opportunities in software development, e-commerce, fintech, and IT services.
• Pharmaceuticals: Growing domestic demand and government support for local pharmaceutical production and distribution.

Advantages of Starting Business in Uzbekistan:

• Large Domestic Market: Most populous country in Central Asia.
• Abundant Natural Resources: Rich in minerals, hydrocarbons, and agricultural land.
• Strategic Location: Central position in Central Asia, facilitating trade and transit to neighboring countries.
• Ongoing Reforms & Government Support: Strong political will to attract FDI and liberalize the economy.
• Young & Educated Workforce: A relatively young and increasingly skilled labor force.
• Growing Tourism Sector: Untapped potential in cultural and historical tourism.
• Developing Infrastructure: Significant investments in improving connectivity and utilities.

Imports & Exports: Uzbekistan’s trade balance is heavily influenced by its commodity exports and growing demand for industrial goods.

Major items which are exported from Uzbekistan:

• Gold
• Natural Gas
• Cotton and Textile Products
• Copper
• Fertilizers
• Fruits and Vegetables
• Uranium

Major items which are imported in Uzbekistan:

• Machinery and Transport Equipment
• Chemical Products
• Foodstuffs (e.g., cereals, sugar)
• Iron and Steel
• Petroleum Products
• Pharmaceuticals

Major items traded between Uzbekistan and India (as of June 2025): Trade between Uzbekistan and India is growing, driven by increasing cooperation and mutual interests, particularly in pharmaceuticals and IT.

• Exports from Uzbekistan to India: Primarily include cotton, pulses (chickpeas, lentils), mineral fertilizers, and some basic chemicals.
• Imports in Uzbekistan from India: Predominantly consist of pharmaceuticals, machinery and equipment, chemical products, textiles, and some agricultural products. There is also growing interest in IT services and educational cooperation.

Manufacturing: Uzbekistan’s manufacturing sector is diversifying beyond its traditional focus on cotton processing and has seen growth in various areas.

• Textile Industry: Significant production of cotton yarn, fabrics, and garments, utilizing domestic cotton resources.
• Automotive Industry: Production of vehicles and automotive components, often in joint ventures with international brands.
• Food Processing: Processing of various agricultural products, including fruits, vegetables, and grain.
• Chemical Industry: Production of fertilizers, plastics, and other chemical products, leveraging natural gas resources.
• Metallurgy: Processing of copper, gold, and other metals.
• Electrical Appliances: Growing production of various consumer electronics.

Mining: Mining is a critical sector for Uzbekistan’s economy, with diverse and abundant mineral resources.

• Natural Gas: Significant reserves, crucial for energy and chemical industries.

• Gold: Uzbekistan is one of the world’s largest gold producers.

• Uranium: A major global producer and exporter of uranium.

• Copper: Significant reserves, with ongoing development projects.

• Silver: Substantial reserves, often extracted with other non-ferrous metals.

• Other Minerals: Includes lead, zinc, tungsten, potassium, coal, and various construction materials.

• GDP = $105.8 billion (nominal, 2024 est. IMF)

• GDP Growth = 5.5% (2024 est. IMF); 5.5% (2025 forecast, IMF)

• Ease of doing business rank = The World Bank’s ‘Doing Business’ report has been discontinued. In its last edition (2020), Uzbekistan ranked 69th out of 190 economies, reflecting significant improvements in recent years due to ongoing reforms, although challenges in certain areas persist.

• GDP per Capita = $2,870 (nominal, 2024 est. IMF)

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