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Country-specific special economic zones (SEZs) are not common but given Uzbekistan’s push to its India policy, Tashkent is setting up an SEZ exclusively for Indian companies amid President Shavkat Mirziyoyev’s decision to modernise the local economy.

The Uzbek government is hoping to attract Indian investments in a big way in what would be reminiscent of the days when Indian merchants based in Samarkand and Bukhara were an integral part of the local economy.

Plans are afoot for setting up an SEZ in Uzbekistan especially for Indian pharmaceutical companies, which are keen to set up manufacturing facilities there, according to senior Uzbek officials. With the frequency of flights operating between the two countries set to increase from 2018, the officials are hoping quantum increase in business travellers besides tourists from India. The government here is planning to further simplify visas for Indian nationals.

A big push to economic partnership came when Uzbek foreign minister Abdulaziz Kamilov visited India this August. He was joined by Elyor Ganiev, Uzbek minister of foreign trade, on the visit. The two ministers focused on enhancing partnership in health, pharmaceuticals, ICT, silk, food processing, tourism and leather sectors.

For Indian business houses, Central Asian countries can be promising markets and Uzbekistan holds multitude of opportunities in various sectors. The country has created a number of free industrial economic zones (FIEZ) to promote foreign businesses.

One of them, ‘Navoi’ FIEZ offers a wide range of opportunities for foreign investors and initially endows business with important comparative advantages. This territory is subject to special legislative regulations including for taxes, currency, customs and simplified order for entry, stay and departure for non-residents of Uzbekistan. To ensure the favourable conditions for investors, production sites in Navoi FIEZ are provided with high-level infrastructure, claimed an official here, adding FIEZ enterprises are provided adequate transport and service infrastructure, labor security systems and comfortable living conditions.

Uzbekistan is ready to create the most favourable investment climate for Indian business, according to senior Uzbek officials. Uzbek companies are willing to offer wide opportunities for establishing partnership with Indian business in industry and organization of modern high-technological productions, as well as introduction of innovation technologies, such as nano technologies, pharmaceuticals, textile, information and communication technologies (ICT) and alternative energy.

Indian presence can be further buoyed by the fact that the World Bank is planning budget-support loan of up to $1 billion for Uzbekistan. The Uzbek government last month lifted most of the restrictions on foreign exchange by allowing companies and citizens to freely trade in foreign currencies.

India accounted for 0.4% of Uzbekistan’s total volume of exports in the six months to June 2016, occupying the 20th place among its trading partners, and 2.9% of its imports, occupying the 20th place among its trading partners, and 2.9% of its imports, occupying the seventh place, according to local government statistics.


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