Uzbekistan Trade Profile

Table of Contents

Overview

The Republic of Uzbekistan is a Central Asian country that serves as one of two doubly land-locked countries in the world, bordered by 5 land-locked countries. The country holds the largest population in Central Asia, standing at 34.2 million, with a GDP per capita of $1,751.

The Uzbek economy is one that is agriculture-oriented, with natural resources dominating the country’s exports due to its status as a producer of oil, natural gas and gold, and as the second largest exporter of cotton globally. The country’s top products were identified to include citrus fruits, chopped rice, knitwear, vegetables, sheep and goatskins, jerseys, and similar fabrics. The unrealized export potential of its fruit and vegetable economy estimates at 70%, with a high potential for increased exports of carrots, turnips, peppers, eggplants, and onions, amongst others. There is further export potential for its textile industry, automotive industry, and non-ferrous metallurgy, and chemical industry products.

As of 2019, Uzbekistan was labelled the 78th largest export economy in the world, with its global exports worth $15 billion and global imports of $22 billion, resulting in a trade deficit of $7 billion. Uzbekistan’s top 10 export and import countries of 2019 are highlighted in Figures 1.1 and 1.2 below respectively.

Figure 1.1: Exports
Figure 1.1: Exports
Figure 1.2: Imports
Figure 1.2: Imports

Imports and Exports Profile

Imports

In 2019, Uzbekistan received imports worth $32.5M from Pakistan, where the main product received were packaged medicaments ($10M), tropical fruits ($3.73M), and citrus ($2.66M). The categories of products imported include vegetable products constituting 41.8% of imports from Pakistan, chemical products at 41.3%, textiles at 7.45%, metals at 3.7%, foodstuffs at 1.8%, machines at 1.5%, plastics and rubbers, medical instruments, footwear, animal hides, stone and glass, and animal, wood and mineral products. In 2020, Uzbekistan’s imports from Pakistan constituted US $25.21M, according to the United Nations COMTRADE database on international trade. The major products imported from Pakistan in 2020 have been highlighted in Figure 2.1 below.

Figure 2.1 Imports from Pakistan in 2020

Exports

In 2019, Uzbekistan exported $95.6 million to Pakistan, where the main products exported were dried legumes ($73.5 million) constituting 76.9% of products exported to Pakistan, non-retail pure cotton yarn ($10 million) at 10.5%, and onions ($5.19 million) at 5.42%. Other major exports included buckwheat at 2.48%, and metals and mineral products at 3.34%. In 2020, Uzbekistan’s exports to Pakistan constituted $96.95 million, according to the United Nations COMTRADE database on international trade. The major products exported to Pakistan in 2020 have been highlighted in Figure 2.2 below.

Figure 2.2 Exports to Pakistan in 2020

Increasing exports to Uzbekistan

From Pakistan’s perspective the country needs to focus on increasing its exports of pharmaceutical products, wheat, potatoes, sugar, surgical instruments, bananas, lead-acid accumulators and milled rice to Uzbekistan. Pakistan also has a great export potential for exporting medicaments, medical instruments and inflatable balls to Uzbekistan. Other products for which a market can be developed in Uzbekistan include Portland cement, polyethylene, parts of gas turbines, vegetable fats, food preparations and products of iron.

Pakistan may also adopt alternatives for shipping consignments to ease the export process from Pakistan to Tashkent, Uzbekistan, which include:

  1. The lowest cost shipping alternative
    • From Lahore to Tashkent: gives a freight rate index of 4,406, a transit time estimate of 3.7 days and a carbon dioxide emission index of 2,334
    • From Karachi to Tashkent: gives a freight rate index of 6,615, a transit time estimate of 5.2 days and a carbon dioxide emission index of 3,640
  1. The shipping alternative with cost advantage
    • From Karachi to Tashkent gives a freight rate index of 9,214, a transit time estimate of 38.3 days and a carbon dioxide emission index of 3,422. The shipment moves from Muhammad Bin Qasim port (Karachi) to Singapore port, from Singapore port to Tianjin Xingang port, from Tianjin Xingang port to Tianjin rail yard, from Tianjin rail yard to Chimkent rail yard finally reaching Tashkent, Uzbekistan.
  1. The shipping alternative with transit time advantage
    • From Karachi to Tashkent gives a freight rate index of 11,005, a transit time estimate of 34.3 days and a carbon dioxide emission index of 4,009. The shipment moves from Karachi Port to Nansha port, from Nansha port to Shenzhen rail yard, from Shenzhen rail yard to Chimkent rail yard finally reaching Tashkent, Uzbekistan.
  1. The environmentally friendly alternative
    • from Karachi to Tashkent gives a freight rate index of 9,869, a transit time estimate of 36.3 days and a carbon dioxide emission index of 3,165. The shipment moves from Muhammad Bin Qasim port (Karachi) to Nhava Sheva port, from Nhava Sheva port to Nansha port, from Nansha port to Shenzhen rail yard, from Shenzhen rail yard to Chimkent rail yard finally reaching Tashkent, Uzbekistan.
  1. The consignments in question can also be dispatched to Tashkent, Uzbekistan from Lahore, Pakistan via the shipping alternative with cost advantage
    • The aforementioned alternative gives a freight rate index of 11,334, a transit time estimate of 5.1 days and a carbon dioxide emission index of 5,973. The shipment moves from Lahore, Pakistan to Kabul International airport, from Kabul International airport to Dushanbe airport wherefrom it reaches Tashkent, Uzbekistan.

Trade Framework Between Uzbekistan and Pakistan

Bilateral relations

Bilateral relations have been established between Uzbekistan and Pakistan through agreements and memoranda of understanding [MoUs] which have been provided in the table below.

Sr. Name of Agreement and/or MoU Description Date
01 Agreement between the Government of the Islamic Republic of Pakistan and the Government of the Republic of Uzbekistan on Economic and Trade Cooperation The agreement between Pakistan and Uzbekistan was aimed to promote facilitation of trade cooperation between the two countries to enhance economic activity in the regions. 1992
02 Memorandum of Understanding on Cooperation between the Ministries and Organizations of the Islamic Republic of Pakistan and the Republic of Uzbekistan in the spheres of Railroads and Automobile Transport, Telecommunications, Energy, and Banking The MoU was signed between ministries and organizations of Pakistan and Uzbekistan to facilitate the use of rail, automobile transport, effective forms of telecommunication, energy and banking to promote trade between the two countries. 1992
03 Memorandum of Understanding about Cooperation for Regulation of Transit Transportation between the Ministry for Foreign Economic Activity and the Government of the Islamic Republic of Pakistan The MoU was signed between the Ministry for Foreign Economic Activity and Pakistan to regulate the use of transit transportation between the two regions for the purposes of trade. 1993
04 Agreement on Mutual Assistance in Customs Administrations between Pakistan and Uzbekistan The agreement was set to ensure reduced clearance times and optimum trade facilitation for import, export and transit cargo. Further, effective control over smuggling through enhanced cooperation would be possible. The Agreement would also ensure reduced risk of evasion of duties and taxes, promotion of exports, including transit trade, not only between both countries but also in the region. Improvement of clearances and service delivery at the Border Crossing Points (BCPs) was also another benefit. 2001
05 Agreement on Cooperation in the Sphere of Support of Small and Private Entrepreneurship between the Government of the Republic of Uzbekistan and the Government of the Islamic Republic of Pakistan The agreement was set to ensure support of small and private enterprises between the two countries, to facilitate goods and services for trade purposes. 2006
06 Memorandum of Understanding between the Government of the Republic of Uzbekistan and the Government of the Islamic Republic of Pakistan on Trade-Economic and Investment Cooperation The MoU was signed to ensure cooperation between Uzbekistan and Pakistan in relation to trade and investment in the regions. 2006
07 Memorandum of Understanding between the Federal Board of Revenue, Islamic Republic of Pakistan and the State Customs Committee of the Republic of Uzbekistan on Methodological Instrument for Exchange of Information on Customs Statistics of Bilateral Trade This MoU was signed between the FBR of Pakistan and Uzbekistan’s State Customs Committee to ensure a manner of exchange of information on customs statistics of bilateral trade between the two nations. 2006
08 Memorandum of Understanding on the Establishment of a Joint Business Council between Chamber of Commerce and Industry of Uzbekistan and the Federation of Pakistan Chambers of Commerce and Industry This MoU was signed in regards to the establishment of a joint business council between the Chambers of Commerce of Uzbekistan and Pakistan, for the expansion of trade and the development of the business environment in the two countries. 2006
09 Agreement between the Government of the Islamic Republic of Pakistan and the Government of the Republic of Uzbekistan on Cooperation in the Field of Transport and Transit of Goods The agreement entails cooperation between Pakistan and Uzbekistan in regards to transit of goods and means of transport, to facilitate trade. 2007
10 Protocol on the Exchange of the Instruments of Ratification of the Agreement between the Government of the Islamic Republic of Pakistan and the Government of the Republic of Uzbekistan on Cooperation in the Field of Transport and Transit of Goods The protocol entailed ensuring cooperation between Uzbekistan and Pakistan in terms of transport and transit of goods to facilitate trade between the two countries. 2011
11 Memorandum of Understanding between the Trade Development Authority of the Islamic Republic of Pakistan and the Ministry of Foreign Economic Relations The MoU was signed to facilitate development of trade between Pakistan and Uzbekistan. 2015
12 Agreement between Uzbekistan and Pakistan on Transit Trade The agreement aims to shift the entire trade of the Uzbekistan from Iranian Port Bandar Abbas to Pakistan seaports, providing all Central Asian States access to Pakistani sea ports, mainly Gwadar Port. It covers trade and transit of goods by road and rail along with customs procedures, largely on the pattern of APTTA, which was a comprehensive and time-tested agreement and improved mechanisms.

Regional Agreements

  1. Shanghai Cooperation Organization (SCO)

Pakistan and Uzbekistan share common interests under the framework provided by the SCO, allowing for diverse areas of cooperation between the two regions in terms of developing trade and economic linkages. With advantage of their geographical proximity, elimination of trade barriers, simplified customs procedures, and boosted investment would fall under the purview of the agreement, to facilitate sustainable socio- economic growth, intensified trade, economic and investment activity, and developing cooperation in high-tech sectors.

  1. Economic Cooperation Organization (ECO)

In 1985, the Economic Cooperation Organization (ECO) was established to promote economic, technical, and cultural cooperation among the member states, including Pakistan and Uzbekistan. With aim to promote regional economic integration, the agreement provides means to augment cooperation between Pakistan and Uzbekistan in the areas of connectivity, trade, energy, tourism, investment, industry, economic growth and productivity, social welfare and environment. Enhancing Cooperation for furtherance of education and scientific linkages, cultural and people to people contacts within the ECO region also remained amongst the priorities.

Recent Developments

  • Since June 2022, foreign vehicles engaged in international road transport are allowed to transit through the territory of Turkmenistan along the route Sarakhs (Iran) Sarakhs (Turkmenistan)>> – Farap (Turkmenistan) – Alat (Uzbekistan) » – Sarakhs (Turkmenistan) – Sarakhs (Iran) checkpoint with drivers.
  • Pakistan Customs processed the first-ever TIR consignment from Karachi at Torkham destined for Tashkent via Afghanistan, consisting of herbal medicines. Due to accession to the TIR convention, the Afghan government did not check Pakistani trucks carrying goods to Central Asian countries and ensured uninterrupted flows of trucks across the Pak-Afghan border.
  • The first-ever consignment of four trucks from Uzbekistan reached the Torkham border in Pakistan by land as result of the government’s efforts to strengthen regional coordination. An Uzbek truck carrying leather goods left Tashkent on May 9, passing through Afghanistan and reached Torkham on the Pakistani border on May 11, from where the goods were delivered to Faisalabad on May 13.
  • In April/May, courier service TCS had piloted Pakistan’s first land route for trade with Central Asia. A TCS truck set out on the Torkham-Kabul-Hairatan-Termez-Tashkent route, operating under the T.I.R Customs Transit System, and returned successfully.
  • Pakistan and Uzbekistan signed a protocol on the establishment of the Joint Security Commission which was followed by the inaugural session of the Commission formed under the protocol. General Victor Makhmudov and Dr Moeed Yusuf participated in the signing ceremony and led their respective delegations. The signed protocol covered wide-ranging security-related matters of mutual interest and established a coordination mechanism between Pakistan’s National Security Division and the Security Council of Uzbekistan under their respective heads.
  • The U.S.-Afghanistan-Uzbekistan-Pakistan Quad was announced, a diplomatic platform focused on enhancing regional connectivity and encouraging long-term peace and stability in Afghanistan, a prerequisite for regional connectivity. A productive U.S. role in the region would encourage increased connectivity via better infrastructure to promote trade.

Key Institutions

The financial institutions mutually affiliated with Uzbekistan and Pakistan are as follows:

  1. International Monetary Fund (IMF)
  2. The World Bank
  3. Central Asia Regional Economic Cooperation (CAREC) Program:

The Central Asia Regional Economic Cooperation (CAREC) Program is a partnership of 11 countries and development partners, including Pakistan and Uzbekistan, working together to promote development through cooperation, leading to accelerated economic growth and poverty reduction. The program may serve as a proactive facilitator of practical, results-based regional projects, and policy initiatives critical to sustainable economic growth and shared prosperity between the regions, by helping establish multimodal transportation networks, increasing energy trade and security, facilitating free movement of people and freight, and laying the groundwork for economic corridor development.

  1. Islamic Development Bank (IsDB)
  2. Asian Development Bank
  3. International fund for agricultural development (Ifad)