Promising niches for business development in Uzbekistan

Western countries have imposed serious economic and political sanctions against Russia, which has significantly complicated the work of domestic businesses with Western partners. Therefore, today more and more Russian companies are looking for new opportunities and relying on the development of business cooperation with the countries of Asia and Africa.

One of the countries that is interesting for domestic business today is Uzbekistan. The population of Uzbekistan is growing rapidly and has already exceeded 36 million people. The country's leadership, led by President Shavkat Mirziyoyev, is pursuing a policy of socio-economic reforms, developing transport infrastructure, actively cooperating with Russia, China, Turkey and other states. It is important to note that the authorities of Uzbekistan, despite pressure from the West, are trying to maintain a neutral line, continuing and in some places even significantly increasing interaction with their Russian partners. Thus, at the end of 2022, trade turnover between Russia and Uzbekistan increased by 23%.

In Uzbekistan today there is a demand for cooperation with Russian companies in a variety of areas. Let's try to at least briefly consider the most promising of them. Thus, Uzbekistan today and in the foreseeable future will be interested in the supply of energy equipment from Russia. We are talking about power machines, generating equipment for solar power plants, components of wind power plants and others. Due to population growth and the active development of business in the country, the number of energy consumers is growing and in the winter months there is an acute shortage of energy. The main share of electricity is generated in Uzbekistan at thermal power plants from natural gas. However, the country's authorities today rely on the development of renewable sources of electricity, as well as hydropower.

The transport industry of Uzbekistan also needs significant modernization, therefore the authorities of the republic and Uzbek transport companies, which are usually state-owned, are very interested in interacting with Russian partners in this area. We are talking about updating the rolling stock of railways: electric locomotives, diesel locomotives, carriages, including metro trains. A promising area for cooperation is the digitalization of railway infrastructure: the introduction of the industrial Internet of things, the use of big data (processing large amounts of data), the development of intelligent control systems and “technical vision” systems. Companies from Uzbekistan operating in the banking sector, telecommunications and a number of other sectors are interested in Russian experience in the field of digitalization and the creation of digital ecosystems.

The chemical, petrochemical and pharmaceutical industries are also promising areas for investment in the economy of Uzbekistan. The synthesis of pharmaceuticals can bring substantial profits to Russian pharmaceutical companies entering the Uzbekistan market. This market could be worth billions of dollars.

Another promising area for Russian companies in Uzbekistan is deep processing of food products. The climate of Uzbekistan makes it possible to grow vegetables and fruits that are in demand in Russia, which are now actively exported to our country. However, the potential for cooperation here is much greater: we are talking about the supply of canned products, the development of packaging and packing capacities, and the supply of frozen meat and dairy products. Within this direction, we can separately highlight the supply of Uzbek winemaking products and other alcohol: cognac, wine and beer. As a rule, having a relatively low price, wine and other alcoholic products from Uzbekistan are of stable and good quality, and could expand their niche in the Russian market.

Of course, the areas for work in Uzbekistan for Russian business are by no means limited to the above: there is also the textile industry, electrical engineering and much more. With the right approach, many Russian companies will be able to find their niche in the growing market of Uzbekistan. Thus, in the first three months of 2023 alone, 240 joint Russian-Uzbek enterprises were established in Uzbekistan, which is more than double the same indicators in 2022: then 107 joint ventures were established during the same period.

The almost complete absence of a language barrier, the proximity of legal practices and technical regulations significantly facilitate interaction. However, to successfully start working in Uzbekistan, the management of Russian companies should also be aware of the specifics of this country: its legislation, the work of the bureaucracy, regional specifics, peculiarities of business culture and the mentality of society. Knowledge of these features will allow you to avoid pitfalls and successfully develop your business in Uzbekistan.