Uzbek government to allocate $200 mln for textile industry development

Proceeding from the Decree "On measures on the support of activity of cotton clusters, fundamental reforming of textile and garment industry and further increase of the export potential of the industry" Uzbekistan will increase the output of finished products with high added value, textile production by 2.1 times and export by 2.6 times in the next 5 years.
In order to bring the production of carpets and home textiles to a new level through the deep processing of the cotton fibre, the Fund for Rehabilitation and Development allocates $200 million to support exports at 4% per annum for 3 years. The funds will be used to ensure uninterrupted revolving financing for enterprises-exporters of carbonized, knitted fabrics and ready-made garment and knitted products; credit lines will be opened in commercial banks for projects on carbonizing, carpet-making, dyeing-finishing, production of ready-made garment and knitted products in the amount of $100 million for 10 years, at 4% per annum with a 3-year grace period and at 5% per annum for the remaining period.
Concessional loans are granted on commitments to ensure exports, account for 50% of the total production, the participation of own funds, including buildings and structures, working capital of at least 30%, and the lack of arrears on loan commitments. In addition, the requirement for monthly prepayment for electricity consumption by textile and clothing and knitwear companies is cancelled.
The Export Promotion Agency reimburses textile and apparel and knitwear companies 50% of the cost of implementing IFRS-based production, but not more than 25 thousand dollars. These costs are reimbursed by the enterprise after borrowing funds from international financial institutions and foreign commercial banks in the prescribed manner.
To finance pre-export and export-related trade operations at the expense of the Export Support Fund, based on the volume of exports during the last 12 months, financial resources are allocated for a period of 3 years in the following amounts:
- in case of an export volume of up to $5 million - $1 million
- in case of export volume of $5-10 million - $2 million
- in case of export volume of $10-$15 million - up to $3 million
- in the volume of exports from $15 to $20 million - up to $4 million
- for exports over $20 million - up to $5 million
As an alternative, textile and garment enterprises are allowed to transfer abroad up to $100 thousand per year without special permission to establish a trading house and a store abroad. By the end of the year, small industrial zones specializing in textiles will be created in Andijan, Namangan and Kashkadarya regions, and in Tashkent region-industrial technopark specializing in deep processing of products of textile and leather industries.