Yuri Kutbitdinov
There are about a thousand manufacturing enterprises operating in the electrical engineering sector of Uzbekistan, most of them small, producing over two thousand types of products. Almost all enterprises in the industry are privately owned. The total number of people employed in the industry exceeds 35,000.
The 76 largest enterprises in the electrical engineering sector, which account for over 90% of the industry’s output, are members of the Association of Electrical Engineering Manufacturers (UzEltechSanoat). Among these, 18 produce electrical wires and cables, 27 manufacture household appliances, and 32 are involved in the production of power transformers and other electrical products.
The Development Strategy of New Uzbekistan for 2022-2026 aims to increase industrial production by 1.4 times by 2026. This includes doubling the production of high value-added products in the electrical engineering sector and tripling exports.
The Uzbekistan-2030 Strategy, adopted in September 2023, is designed to achieve the goals outlined in the Development Strategy of New Uzbekistan. It also targets an increase in copper processing within the electrical engineering industry to 300,000 tons per year and aims to raise the localization level of manufactured products to an average of 65%.
As a result, Uzbekistan is focusing on the advancement of technologically sophisticated industries, including electrical engineering, and is providing substantial state support to this end.
Over the past seven years, the President of Uzbekistan has enacted several legislative measures to provide customs and tax benefits to enterprises in the electrical engineering sector. These measures include substantial subsidies to cover transportation and other related expenses.
Specifically, until January 1, 2027, electrical engineering enterprises have been granted a 50% reduction in both profit and property taxes. In addition, the exemption from customs duties on imported raw materials, components, and equipment for production purposes has been extended.
Several programs have also been approved to support investment projects within the electrical engineering industry, focusing on the technical and technological upgrading of existing facilities and the establishment of new production lines.
As a result of these initiatives, the industry has attracted $935 million in investments over the past seven years, with approximately $400 million coming from foreign direct investments. Furthermore, more than 260 new investment projects, valued at over $800 million, have been initiated. These include 50 cable production projects worth $120 million, 115 household appliance projects worth $380 million, 40 power equipment projects valued at $60 million, and 58 other electrical engineering projects totaling $250 million.
These developments have led to the creation of over 13,000 new jobs, bringing the total number of industry jobs to 35,000.
Through the implementation of investment projects aimed at modernizing and establishing new production facilities, production of a wide range of electrical engineering products has expanded successfully. This includes household appliances such as washing machines, electric stoves, vacuum cleaners, hoods, water heaters, and new models of refrigerators and washing machines under the Samsung brand.
Moreover, SMART HD TVs, built-in hobs and gas stoves, industrial air conditioners, and various types of electrical cables (both high and low voltage) for use in solar energy systems, household appliances, and self-supporting insulated cables are also produced.
Additionally, the industry produces dry transformers, electronics including monoblocks, SIM cards, and electronic boards for household appliances, as well as smart meters for electricity, gas, and water consumption. Other products include components for solar panels and renewable energy stations, elevators, escalators, and water pumps.
Between 2017 and 2023, the production volume of the electrical engineering industry increased 7.1-fold to reach $1.98 billion. This growth includes a 5.5-fold increase in the production of wires, cables, and copper products, reaching $792 million; an 8.2-fold increase in household appliances, totaling $633 million; and a 9.3-fold increase in power and technical equipment, amounting to $567 million.
The electrical engineering industry’s contribution to economic development is also on the rise. Although the industry’s share of the overall economy remains below 1%, it has grown 1.5 times in recent years.
The increase in the production of electrical engineering products has led to a substantial rise in export volumes, which have surged 5.5-fold to $1,047 million over the specified period. This includes a fourfold increase in exports of wires, cables, and copper products to $576 million; a more than tenfold rise in household appliances to $214 million; and a twelvefold increase in power equipment and other products to $257 million.
Significantly, the notable growth in household appliance exports—over tenfold—can be attributed to Artel Electronics establishing new production facilities in Uzbekistan. Specifically, refrigerator exports have surged fifteen fold to $58 million, televisions six fold to $52 million, electric stoves 4.5-fold to $40 million, washing machines fivefold to $20 million, and air conditioners fourfold to $15 million, among other increases.
Additionally, both the geographic reach and the range of electrical engineering products exported have expanded. Currently, around 200 different types of electrical products are exported to nearly 70 countries, and the number of exporting enterprises in the electrical engineering sector has increased to 100.
In January 2024, a Presidential Decree titled “On Additional Measures for Further Increasing the Production and Export Potential of the Electrical Engineering Industry” was issued, setting target indicators for the industry’s development in the coming years.
In 2024, the plan is to boost production volume by nearly 30% to $2.6 billion, increase exports by 43% to $1.5 billion, and raise the volume of copper processing into finished products to 140,000 tons. For 2025, the targets are set to grow production to $3.2 billion, exports to $2.0 billion, and copper processing to 160,000 tons.
To achieve these objectives, the Program for Creating New Production Capacities and Diversifying Production in the Electrical Engineering Industry for 2024-2026 and beyond has been approved. This program plans to execute 294 investment projects totaling over $4 billion in the coming years.
In summary, Uzbekistan has established the necessary conditions for enterprises in the electrical engineering sector to expand production and broaden their market reach, both domestically and internationally.
Consequently, there are ambitions not only to enhance exports to traditional markets but also to penetrate new ones. Specifically, the export of electrical engineering products is expected to grow towards European markets, leveraging the GSP+ preferential trade regime, as well as South Asian and Middle Eastern countries.
*The author is the Chief Research Officer at the Center for Economic Research and Reforms, under the Administration of the President of the Republic of Uzbekistan.
**The opinions in this article are the author’s own and may not represent the views of The Diplomatic Insight. The organization does not endorse or assume responsibility for the content.
