Uzbekistan’s textile industry, a cornerstone of the nation’s manufacturing sector, is receiving a lifeline through an ambitious government rescue initiative. President Shavkat Mirziyoyev unveiled the “100 Striking Days” program on August 13, delivering a comprehensive support package worth 7 trillion sums ($560 million) to address mounting challenges in the sector that employs over half a million workers and generates $10 billion in annual production.
The textile industry represents a vital economic pillar for Uzbekistan, accounting for 3% of the country’s GDP and 14% of total industrial production. Over the past five years, the sector has witnessed remarkable expansion with 396 large enterprises established through $3.5 billion in investments, creating employment for more than 500,000 people — representing 20% of the nation’s industrial workforce.
Market pressures expose structural vulnerabilities
Despite this impressive growth trajectory, the industry has encountered significant headwinds during 2024-2025, with production and export volumes experiencing a notable slowdown. The primary catalyst for this downturn has been the dramatic collapse in global cotton prices, which plummeted from $3,000 to $1,500 per ton over a three-year period, severely impacting the profitability of Uzbek textile enterprises.
The crisis has revealed deeper structural issues within the sector. Only 16% of textile enterprises currently hold international certifications, limiting their access to premium global markets. More concerning is the industry’s substantial debt burden, with commercial credit obligations reaching $2.2 billion, of which 90-95% are denominated in foreign currencies, exposing companies to additional exchange rate risks.
President Mirziyoyev criticized entrepreneurs who have been exploiting preferential state resources for “speculation” in the cotton market rather than focusing on value-added production, highlighting the need for more strategic utilization of government support.
Comprehensive financial relief and modernization incentives
The “100 Striking Days” program delivers immediate financial relief through multiple channels. Credit extensions up to five years will be granted to textile clusters, with temporary interest payment exemptions. The government will write off penalties totaling 377 billion sums (over $30 million) on credits issued during 2022-2023, providing substantial breathing room for struggling enterprises.
Farmers will receive direct support through subsidies of 1 million sums ($80) per ton of harvested cotton, while textile enterprises throughout the value chain will benefit from a reduced social tax rate of just 1%. Companies establishing workplace childcare facilities will receive subsidies equivalent to those provided to private kindergartens, addressing workforce retention challenges.
Energy infrastructure improvements feature prominently in the support package, with $200 million allocated for solar panel installations at textile facilities, accompanied by interest rate compensation of up to 10%. This initiative addresses chronic electricity supply issues while promoting sustainable manufacturing practices.
Trade facilitation measures include the elimination of customs duties on mixed fabrics and materials until January 1, 2028, and the launch of projects targeting production of at least 100,000 tons of mixed fabrics annually. Preferential lending of up to 10 billion sums over five years will be available for factories established in remote regions, contingent on creating 200 jobs with competitive wages.
Modernization mandate with strict compliance requirements
The program places particular emphasis on domestic cotton processing capabilities, addressing a critical gap in the value chain. Currently, 15 clusters lack fiber processing facilities entirely, while 12 others have insufficient capacity. These enterprises must establish cooperation agreements with spinning factories that require raw materials, with attractive financial mechanisms provided to facilitate such partnerships.
However, the government has established clear performance requirements. Clusters that fail to develop fiber processing capabilities by 2026 will lose their preferential status and access to subsidized cotton procurement credits. This ultimatum demonstrates the administration’s commitment to moving beyond raw material exports toward higher-value manufacturing.
The expansion plan includes launching 20 new garment factories by the end of 2025, followed by an additional 30 facilities in 2026. The first of these new enterprises will be established in Karakalpakstan, extending industrial development to previously underserved regions.
For international businesses operating in furniture, interior design, and construction sectors, Uzbekistan’s textile industry transformation presents compelling opportunities. The government’s substantial financial commitment and modernization requirements will create demand for advanced manufacturing equipment, quality control systems, and technical expertise. Foreign suppliers of industrial textiles, furnishing materials, and specialized machinery stand to benefit from the sector’s upgrade trajectory. The emphasis on international certification standards opens doors for consulting services and technology transfer partnerships. Moreover, as Uzbek textile manufacturers strengthen their capabilities and expand production capacity, they will become more attractive partners for global brands seeking reliable, cost-competitive sourcing options in Central Asia’s largest textile market.
