On April 23, President of the Republic of Uzbekistan Shavkat Mirziyoyev convened a meeting on issues of ensuring stability in the textile industry and mitigating the pandemic impact on the sphere.
There are more than 2 thousand enterprises in Uzbekistan in this sector, employing 365 thousand people. Over the past three years, the export potential of the industry has doubled. Last year, $ 1.6 billion worth of products were delivered to foreign markets.
But this is hardly enough, since the reserves and opportunities in the domestic textiles industry are colossal.
Uzbekistan has the resources and means sufficient to fully process the cotton grown in the country, bring exports up to $ 15 billion and provide employment for more than 3 million people.
The meeting participants addressed the issue of securing enterprises with working capital for the steady operation of the industry.
The order has been given to extend the final payment term from 90 to 150 days for cotton fiber sold before April 1 this year.
The Ministry of Finance has been instructed to introduce a mechanism for the instant return of the amount of value added tax once export is processed at customs, so that enterprises maintain a sound level of working capital.
The head of state urged the executives to increase manufacturing of finished products four- to fivefold over five years, to come through foreign markets by boosting the competitiveness of goods. Special attention was paid to the need to expand the product range and improve quality.
The President instructed in particular to set up large export enterprises with the participation of foreign companies, and the production of popular goods under celebrated brands.
To this end, new enterprises for the export of finished products will be established in Namangan, Samarkand and Tashkent regions. 300 million dollars will be assigned for the implementation of these projects under the credit line of the Fund for Reconstruction and Development of Uzbekistan.
The issue of reducing costs in the chain of procurement of raw materials and production was also raised at the meeting.
Due to the fact that for many years our country exported only cotton fiber, its price was tied to the quotes of the Liverpool Exchange. In fact, cotton fiber is sold on the New York Stock Exchange, whose quotes are 10 percent cheaper than in Liverpool.
The head of our state noted that this fact affects the cost of textile products, and responsible officials were instructed to ensure the pricing of cotton fiber, depending on international stock quotes.
The meeting participants paid attention also to the creation of favorable conditions for textile enterprises to enter foreign markets.
Finished products manufactured in Uzbekistan are mainly supplied to the countries of the region. To enter the European market, our exporters have to pay a 15 percent duty and bear 4 times more transportation costs.
The Ministry of Investments and Foreign Trade, the Uztukimachiliksanoat Association have been tasked with obtaining the status of the beneficiary of GSP+ system for duty-free trade in the EU market. At the same time, the need for accelerating BSI certification of products with the assistance of the International Finance Corporation was noted. Instructions were given for further enhancement of the subsidization of exporters’ expenses.
Responsible executives provided information on issues discussed at the meeting.