Uzbek President Approves Support Measures for Cotton Textile Industry

Tashkent, Uzbekistan (UzDaily.uz) — The President of Uzbekistan has signed a decree outlining measures to improve financial sustainability in the cotton-textile industry and provide additional support for the deep processing of fiber (PP-246).

The document provides a comprehensive set of state support measures for the sector, including subsidies, compensation for a portion of interest expenses on loans, and an accelerated return of value added tax (VAT), the Ministry of Justice reported.

According to the decree, in 2025, cotton-textile clusters and the enterprises established by them that have cultivated raw cotton on assigned land plots will be eligible to receive a subsidy of 3 million soums per hectare.

A mandatory condition for obtaining this subsidy is confirmation by the Agency for Space Research and Technologies (Uzkosmos) that raw cotton was indeed cultivated on the specific land contours provided by the Ministry of Agriculture.

The document also stipulates the allocation of subsidies for projects involving the production of dyed fabric, as well as blended and dyed yarn, implemented before 1 June 2026. This funding will be sourced from the remaining balance of funds previously allocated for subsidizing the purchase of dyeing equipment, using the amounts established by presidential decree No. UP-53 dated 21 January 2022.

Furthermore, until 1 July 2027, cotton-textile clusters and textile enterprises that hold a category "A" rating or higher in the business sustainability rating will have their negative VAT variance returned within 20 days without any audits being conducted.

Beginning with the 2026 harvest, raw cotton producers will receive compensation for a portion of interest payments on preferential loans. This will cover up to 2.5% if the loan is repaid on schedule and up to 5% if it is fully repaid by 31 December. For cotton-textile and textile clusters, provisions are made to reimburse a portion of interest payments on commercial loans attracted for the purchase of raw cotton, specifically covering the portion of the interest rate that exceeds 8% per annum but does not exceed 16%.

Starting 1 September, the Agency for Agrosphere Payments will begin compensating farmers for a portion of the cost of electronic invoices generated during the sale of cotton.

Cotton-textile clusters and textile enterprises will also be reimbursed for a portion of the costs incurred when purchasing raw cotton using their own funds.