Tashkent, Uzbekistan (UzDaily.uz) — Uzbekistan's Public Council for Entrepreneurship Support under the President has rejected a draft decree that would restore import duties of 15–30% on 12 categories of food products currently exempt from tariffs.
The council, chaired by Chamber of Commerce and Industry Chairman Davron Vakhabov, recommended returning the document to the Ministry of Investment, Industry and Trade for revision.
The ministry was instructed to conduct additional analysis, consult businesses and resubmit the proposal.
The draft presidential decree was presented at the council meeting by Sarvarkhoja Khonkhojayev, Head of the Tariff and Non-Tariff Regulation Division of the Trade Policy Directorate within the ministry's Foreign Trade Department.
According to Khonkhojayev, the proposal was developed to implement two presidential directives.
Presidential Decree No. UP-269 of 17 December 2025 requires proposals to revise the list of goods eligible for zero import duties, taking into account food security, the availability of essential products and price stability.
Presidential Decree No. UP-175 of 27 August 2026 calls for measures to eliminate unnecessary permits not required by importing countries and accelerate the issuance of export certificates.
The draft contains two main sections. The first addresses expiring customs exemptions for essential food and consumer goods, while the second focuses on simplifying export certification and other foreign trade procedures.
Currently, 56 categories of essential food and consumer products benefit from zero import duties under Presidential Decrees No. UP-145 of 31 May 2022, No. UP-41 of 23 March 2023, No. UP-217 of 28 December 2023 and No. UP-269.
These exemptions are scheduled to expire on 1 January 2027.
The ministry proposes extending the exemptions for another year, until 1 January 2028, in full for 45 product categories and partially for two tariff lines.
However, the ministry does not intend to extend the exemptions for the remaining products.
These include condensed milk and cream, yogurt, cheese and cottage cheese, apples, pears and quinces, sugar confectionery, chocolate, pasta, mineral and carbonated water, and non-alcoholic beverages.
Khonkhojayev explained that the products were not being removed from the list through a separate decision. Instead, their existing exemptions would simply expire as scheduled.
He said the proposal was based on an assessment of domestic production capacity, output volumes and the extent to which local manufacturers could meet demand.
During the meeting, the chair questioned the statistical evidence and research supporting the ministry's conclusions.
He asked whether the decision not to extend certain exemptions reflected increased domestic production, changes in consumption or other factors.
Questions were also raised about who had assessed the extension of industrial customs benefits and the consequences of exempting buses from recycling fees.
In response, Khonkhojayev presented production and import figures for January–August 2026.
According to the ministry, 84 businesses produced milk and cream in Uzbekistan, with domestic output reaching 84,000 tonnes compared with imports of 15,000 tonnes.
Yogurt was produced by 77 enterprises, while imports totaled 9,800 tonnes during the eight-month period.
Imports of cheese and cottage cheese amounted to 10,300 tonnes.
The meeting chair argued that production volumes alone were insufficient to justify the proposed changes.
He asked whether domestic supplies met recommended consumption levels, whether prices were affordable relative to household incomes and how removing the exemptions would affect the market.
Khonkhojayev said the ministry had conducted analyses of prices and domestic consumption but had not presented the findings at the meeting.
He added that the ministry was prepared to submit the information to the council separately.
Economist and public activist Otabek Bakirov opposed the proposal, arguing that prices for the affected products had increased faster than overall inflation during the previous nine months.
He said the conclusion that domestic production was sufficient had not been supported by adequate economic and financial calculations.
Bakirov recalled that a presidential decree adopted late last year required regular proposals concerning the list of exempt products.
He said he had expected the list to expand rather than contract, given inflation, domestic production conditions and the importance of consumer choice.
According to Bakirov, the expiration of the exemptions would result in a 15% import duty on cheese and cottage cheese and a 20% duty on yogurt, apples and pears.
"Previously, these products were kept under lock and key in our homes and saved until guests arrived. Uzbek people have only recently begun living in a way that allows them not to hide these foods from their children or reserve them for visitors," Bakirov said.
"People have begun moving beyond concerns about basic subsistence and thinking about broader goals. But cheese has not yet reached every Uzbek household."
Bakirov also criticized the practice of extending customs exemptions for only one year at a time.
He said economists had been raising concerns about the approach since 2021 because it sent misleading signals to producers, importers and consumers.
According to Bakirov, the annual uncertainty leaves market participants waiting until late December to learn whether existing exemptions will continue.
He pointed out that the same draft would extend benefits for manufacturers, including cotton-textile clusters, until 2030, while food import exemptions would be extended for only one year.
The industrial provisions include extending customs exemptions for 82 categories of raw materials and semi-finished products used across various industries under Resolution No. PQ-5262.
They also cover exemptions for 47 categories of raw materials, components and spare parts for the textile industry under Presidential Decrees No. UP-171 and No. UP-2.
Bakirov proposed retaining all products whose exemptions were due to expire and extending the zero-duty regime for at least three years.
He also called for removing a provision that would exempt domestically manufactured electric and hybrid buses from recycling fees and their components from customs duties.
Zafar Khashimov, Chairman of the Supervisory Board of Anglesey Food and founder of the Korzinka supermarket chain, supported Bakirov's proposals.
Khashimov argued that the ministry had not provided sufficient evidence that domestic production could meet market demand.
He noted that even when agricultural harvests were adequate, not all products reached consumers in their original form.
Some fruit is processed into products such as jam and juice, while another portion is lost during storage.
Khashimov said price increases exceeding inflation indicated an objective shortage in the market.
According to his figures, cheese prices had risen by more than 18% this year.
He warned that higher import duties would raise prices not only for imported products but also for domestically produced alternatives.
If imported products became 20% more expensive, he argued, local manufacturers would also increase their prices.
According to Khashimov, a 20% tariff increase could ultimately translate into a 25–26% rise in consumer prices.
He added that household incomes generally increase in line with labor productivity rather than inflation.
Citing research, Khashimov said food expenditures account for as much as 40% of income in ordinary households.
He warned that making dairy products more expensive could alter household diets.
If cheese, cottage cheese and yogurt became less affordable, families might increasingly substitute bread and tea with sugar, potentially affecting their health.
Khashimov argued that government policy should instead encourage greater dietary diversity.
The entrepreneur also said annual uncertainty surrounding customs exemptions artificially increased prices.
He explained that December is a period of particularly strong demand for coffee, chocolate and other products, but suppliers sometimes hold goods in warehouses while awaiting decisions on import duties.
Businesses also incorporate the risk of tariff increases into their pricing, resulting in consumers paying approximately 10% more, according to Khashimov.
He argued that such unpredictable measures increased inflation expectations and contributed to further price growth.
Khashimov proposed reviewing customs duties, for example, once every three years and announcing any changes at least six months in advance.
He also advocated uniform rules for identical goods, regardless of their intended use or the ownership structure of the importer.
As an example, he cited a bus-related exemption linked to a requirement that the vehicles not be leased out.
Khashimov warned that such distinctions could create opportunities for corruption.
Meeting participants also raised concerns that higher import duties could encourage smuggling.
They warned that products might be brought into Uzbekistan from neighboring countries, including Kyrgyzstan, without customs inspections or tax payments.
According to participants, this would deprive the state budget of revenue, undermine domestic producers and potentially reduce food safety.
Khashimov added that food transported across borders without refrigeration could pose health risks.
Shokir Bokiyev, founder of the Turon-Himoyasi law firm, highlighted problems affecting domestic livestock and dairy production.
He said an outbreak of foot-and-mouth disease among livestock had temporarily caused dairy products to disappear from store shelves this year.
Restrictions on pasture use had also reduced livestock numbers and contributed to higher meat and milk prices, he said.
According to Bokiyev, beef in Uzbekistan is currently more expensive than in Germany.
He added that some dairy enterprises had reduced their workforce or closed.
Bokiyev urged policymakers to consider shuttle trade and goods imported through cargo services, which are not fully reflected in official customs statistics.
Another participant recalled that a working group had conducted a broader analysis when customs exemptions were extended last year.
According to the participant, the assessment found that Uzbekistan's entire domestic cheese production was insufficient to ensure the uninterrupted operation of even one processing enterprise.
He called for consideration of potential job losses in manufacturing and retail, as well as reductions in tax revenue.
The second section of the draft decree addresses non-tariff trade regulation.
It proposes incorporating all administrative procedures for laboratory testing of goods subject to State Veterinary Service supervision into the Single Window system.
The Business Ombudsman would continuously monitor compliance with legislation during the issuance of permits through the system.
The draft also proposes introducing a Unified Health Certificate on a pilot basis from 1 April to 1 October 2027.
The new document would replace the veterinary certificate, sanitary-epidemiological conclusion and phytosanitary certificate.
Under the proposed system, exporters would submit a single electronic application.
Repeated sampling of the same products would be prohibited, while a single sample would be sent simultaneously to the relevant laboratories.
If all inspections produced positive results, the exporter would receive a Unified Health Certificate.
However, the meeting chair raised concerns about the legal basis for the proposed document.
He noted that Uzbekistan's licensing legislation recognizes veterinary and phytosanitary certificates as separate authorization documents, while the draft does not define the legal status of the new certificate.
Questions also remained about how businesses would operate during the pilot period and how much the certificate would cost.
The chair emphasized that the central issue was whether importing countries would recognize the new document, particularly those with which Uzbekistan had signed mutual recognition agreements covering existing certificates.
Khonkhojayev responded that the draft was still being coordinated with relevant government agencies and had not yet been submitted to the Ministry of Justice.
He said the Business Ombudsman and the Food Safety Committee had submitted comments on the proposed certification provisions.
The Food Safety Committee was also preparing a related document.
According to Khonkhojayev, Georgia is currently the only country that recognizes Uzbekistan's certificate of conformity, while other countries conduct their own assessments.
If an importing country required an existing certificate instead of the proposed unified document, the ministry suggested issuing it free of additional charge under the same application and fee already paid.
Following the discussion, the meeting chair concluded that the draft lacked sufficient supporting calculations and statistical evidence.
The council rejected the proposal and recommended returning it to its developers for further analysis and consultations with businesses.
The ministry was asked to address all questions raised during the meeting before resubmitting the document.
Council members' comments will be recorded in the meeting minutes and forwarded to the relevant ministries and government agencies.
