Uzbekistan Attracts Indian Capital Amid Rapid Growth in Trade and FDI

Tashkent, Uzbekistan (UzDaily.com) — Uzbekistan is actively attracting Indian investment in renewable energy, pharmaceuticals, textiles, and digital technologies amid accelerating economic reforms and a surge of foreign capital, the country’s ambassador said during an interactive session hosted by the PHD Chamber of Commerce and Industry (PHDCCI), according to Indian media reports.

Speaking at what he described as his fifth or sixth engagement with PHDCCI, Uzbekistan Ambassador Sardor Rustambaev noted that the country has transformed into an open and transparent economy in recent years, supported by tax incentives, simplified regulatory procedures, and upgraded infrastructure.

“Uzbekistan’s GDP has grown from US$ 62 billion in 2017 to nearly US$ 115 billion in 2024,” he said, expressing gratitude to the chamber for helping expand India–Uzbekistan business ties.

During this period, foreign trade doubled to US$ 65 billion, while foreign direct investment sharply increased to US$ 120 billion between 2018 and 2024, including US$ 35 billion in the current year alone.

Manufacturing accounted for 35% of this year’s investment inflows, followed by IT, energy, logistics, and mining. Rustambaev emphasized that Uzbekistan is positioning itself as a gateway to a 300-million-strong consumer market through trade agreements and improved transport and logistics infrastructure.

India–Uzbekistan trade is approaching US$ 1 billion, supported by 317 Indian-capital enterprises operating in the country, including 224 fully Indian-owned firms. Over the past three years, 10 projects worth US$ 140 million have been completed, with another 20 projects valued at US$ 350 million underway. Both nations aim to raise bilateral trade to US$ 2 billion in the near term.

Investment opportunities span green hydrogen, life sciences, digital services, apparel manufacturing, rare earth mining, tourism, and education.

Rustambaev noted that Indian tourist arrivals have quadrupled, from 20,000 three years ago to 80,000 last year, with a target of 100,000 this year, supported by Uzbekistan Airways’ expanding routes to Delhi, Mumbai, and Goa, as well as the upcoming Tashkent–Delhi service.

Free economic zones offer global investors customs and tax incentives, while planned rail, air, and road links aim to reduce logistics costs.

Abdulaziz Abduganiev, First Secretary at the embassy, presented videos showcasing reforms that have eliminated more than 500 regulations, liberalized the foreign exchange market, and reduced the corporate profit tax from 23% to 12%.

Uzbekistan has a population of 37 million, 88% of whom are under 55, with a workforce of 20 million growing by nearly 1 million annually. The country ranks among the world’s top producers of natural gas, gold, uranium, and cotton and is investing US$ 14 billion in renewable energy to achieve a 50% green power target.

PHDCCI leaders noted that the session helped Indian companies gain clarity on investment regulations and market potential. Vikas Khanduri, Co-Chair for International Affairs – Europe & CIS, highlighted synergies in pharmaceuticals, agro-processing, IT, textiles, and infrastructure.

Ranjeet Mehta, CEO and Secretary General, urged Indian industries to diversify into emerging markets such as Uzbekistan amid shifting global trade dynamics.

Deputy Secretary General Naveen Seth stated that PHDCCI would soon lead a business delegation to Uzbekistan, supported by both governments.