As previously reported by Spot, Shavkat Mirziyoyev signed a decree on January 16 aimed at developing processing chains in the textile and garment industries. The decree outlines export goals for the upcoming years.

The document also approves the initiative by the Chamber of Commerce and Industry to establish a factoring organization under the Trade Development Company. The authorized capital of the new enterprise will amount to 10 billion sums.

The KRT will provide factoring and leasing services for the textile sector, as well as financing for the purchase and sale of raw materials. The Reconstruction and Development Fund will allocate $100 million for these purposes at an annual interest rate of 4% for a term of 5 years.

Due to the collected debts from export duties on cotton yarn, companies supplying finished garments will receive subsidies. The amount of these subsidies will be proportional to the volume of exported products.

The direct allocation of funds to exporters for financing trade and pre-export operations, initiated in 2020, will be discontinued. Instead, the KRT will allocate funds to banks for lending under conditions set by the Government Investment Commission.

Furthermore, it is mandated to introduce incentives for garment, footwear, and leather goods enterprises for hiring workers from needy families by the beginning of 2028. The profit tax rate will be 2%, and the social tax rate will be 1%.

To qualify, the number of employees from the social protection registry or the registry of poor families must be:

  • at least 15% if the total number of employees is less than 1000;
  • at least 150 people if there are 1000-1500 employees;
  • at least 10% if there are 1500 employees or more.

The average monthly salary of these workers must be no less than 2 minimum wages (2.3 million sums). If a worker is removed from the registry, the incentive will continue for 6 months.

A textile industrial zone covering 30 hectares is to be established in the Namangan region, specializing in the production of ready-made clothing and home textiles. It is planned to build workshops with 2 and 3 floors based on the experiences of China, South Korea, and Turkey.

Earlier, Spot reported that GIZ recommends measures to increase textile exports from Uzbekistan.