Russia and Uzbekistan: 2023-24 Trade and Investment Dynamics


Significant Russian outbound investments are heading East to Central Asia 

Russia and Uzbekistan have had historically close ties, with economic and geopolitical rationale pushing the two countries to seek closer ties. For Russia, Uzbekistan arguably has the most strategic location in the Central Asian region, as the country shares borders with all Central Asian states (Kazakhstan, Kyrgyzstan, Tajikistan and Turkmenistan) in addition to Afghanistan, and sits on a big part of the agriculturally rich Fergana Valley, with a sizable population as well as oil and natural gas deposits.

This has resulted in, at times, difficult phases in bilateral relations between since the break-up of the Soviet Union in 1991. Yet, its strategic location as well as large resources have enabled Uzbekistan to resist Moscow’s pressure to enlist Tashkent into both the CSTO and the EAEU, although it does have a position as an observer state to the latter.

Although Russia’s trade and economic ties have experienced significant shifts following the Ukraine conflict, this has nevertheless positively influenced Moscow-Tashkent ties, as is reflected in the growing dynamics in trade, investment and people-to-people ties. While it is difficult to forecast how the Ukraine issue ends, the positive dynamics in Russia-Uzbekistan ties, based on the trajectory of the past two decades, will likely remain unchanged in the coming years.

Bilateral Trade

Russia returned to first place in the list of Uzbekistan’s main foreign trade partners in 2022, with trade turnover between the countries increasing by 23% compared to 2021 – up to US$9.28 billion (18.6% of Uzbekistan’s total foreign trade turnover). It is also growing; bilateral trade turnover between between the two countries in 2023 is expected to exceed US$10 billion. China with a share of 17.8% in Uzbek trade fell to second place, while Kazakhstan (9.2%) was the third main trade partner.

Uzbekistan’s trade growth with Russia falls within Tashkent’s overall promising trade figures, which in 2022, reached US$50.01 billion. This is 18.6% higher than in 2021. In particular, the volume of Uzbeki exports increased by 15.9% (reaching US$19.309 billion), while imports grew by +20.4% (reaching US$30.699 billion).

Russian exports to Uzbekistan mostly consist of industrial products (42.3% of total supplies of manufactured goods to Uzbekistan), machinery and transport equipment (6.5%), and food products.

Other exported merchandize include metals, food products and agricultural raw materials, wood and pulp and paper products, various chemical and mineral products, precious metals and stones.

Overall, Russia-Uzbekistan trade has been on an upward trajectory for nearly a decade. For example, in the five year period 2015-2020, the volume of trade between the two countries reached US$5.9 billion – more than doubling from US$2.8 billion and indicating a growth rate in excess of 20% per annum.

Taking a longer perspective, in the period 2001-2020 trade, grew from US$1 billion to nearly US$6 billion in 2020. With the growth of bilateral trade, the structure of commerce also evolved. For instance, in 2001 Uzbekistan’s exports exceeded its imports: the country supplied goods worth US$584 million to Russia and imported US$409 million.

These trade growth dynamics have remained unchanged in 2023. According to the Uzbekistan Statistics Agency, in the first four months of this year, Russia has retained its lead position for Uzbek exports at US$789 million worth of products. As for imports, Russia ranked second with about US$2.2 billion worth of imports from Uzbekistan. It should be noted that much of this data is seasonal – trade tends to spike upwards during the harvest months and decline somewhat over the winter.

Uzbekistan’s Agricultural Economic Indicators

Uzbekistan’s economy is mainly dependent on agricultural production. Since most of its population lives in rural areas, employment in the agricultural sector is high, influencing the structure of the country’s foreign trade. A look at Uzbekistan’s export capacity to Russia shows that it mainly consists of agricultural and food products. Other merchandize are food products and agricultural raw materials, chemical industry products, machinery equipment and vehicles, precious metals and stones, clothing, and clothing accessories, of knitted or crocheted kinds, copper, zinc, nuclear reactors and so on.

Yet despite Uzbekistan’s strong position in the agricultural sphere. Russia, as an agricultural importer, has now evolved into Uzbekistan’s net supplier of agricultural and food products. In 2001, Russia imported US$154.3 million worth of agricultural and food products from Uzbekistan, which accounted for 26.4% of their total imports. In 2019, imports amounted to US$228.2 million, which accounted for 19.4%. While in 2001 Russia agricultural exports to Uzbekistan stood at US$34.2 million, in 2019 Russia supplied products worth staggering US$462.3 million.

This shift has been caused by a variety of reasons, such as Russia’s development of its own agricultural base to add to Uzbekistan’s structural production problems. Another, more significant reason is the creation of the Eurasian Economic Union (EAEU). The fact that Uzbekistan sends less agricultural products to Russia doesn’t necessarily mean that the country’s production is lagging behind. Uzbekistan exports significant amount of agricultural merchandize to Kazakhstan, another member of the EAEU.

Russia-Uzbekistan Investment Dynamics

In 2022, Uzbekistan-Russia relations witnessed changes in other areas of bilateral cooperation. For instance, Russia had the highest rate of investment in Uzbekistan – 20.3% of total foreign investment valued at around US$2 billion. Russia tops China in this regard – whose investment made up 16.4%, and Turkiye in third place with a 10.1% share of the total foreign investment into Uzbekistan. Germany and the United States have Uzbekistan investments worth about 6% and 3.8% of the national total respectively.

For comparison, in 2021, Uzbekistan received US$9.3 billion of foreign investment and US$2.7 billion in FDI loans. The top five investor countries were China (US$2.2 billion, mostly part of its Belt and Road Initiative infrastructure development plans), Russia (US$2.1 billion), Turkiye (US$1.18 billion), Germany (US$800.7 million) and South Korea (US$137.4 million).

(Russia’s position is interesting in light of Western attention – as Moscow is seemingly able to make foreign investments to the tune of billions of dollars despite the expense of the on-going situation in Ukraine).

Throughout 2022, some 967 Russian-invested businesses were created in Uzbekistan with the direct participation of Russian capital, almost three times higher than in 2021. As at January 1 2023, a total of 3,156 enterprises (20% of the total number of foreign businesses in Uzbekistan) are now registered in the country as having Russian sourced investment capital. These are the businesses that are now developing Russia’s new trade and investment flows east.

Russian capital investments in Uzbekistan by the end of 2023 are now expected to reach US$2.75 billion. In addition, Uzbekistan plans to launch 68 investment joint venture projects with Russian investors, worth an additional US$4.7 billion. Overall, Uzbekistan has set a goal of attracting US$70 billion in foreign investment over the next five years.

Among the biggest Russian investors is Gazprom, which between 2006-2013 invested US$383 million in the exploration and production of hydrocarbons in various Uzbeki provinces. Moreover, Gazprombank is financing the extraction of hydrocarbon raw materials in Uzbekistan. The total cost of the project for the period of 2017-2021 stood at US$3.9 billion. Russia’s VimpelCom has also invested more than US$1 billion in Uzbekistan.

Russian companies are heavily involved in the development of Uzbekistan’s vast hydrocarbon potential. For example, Power Machines PJSC, has participated in projects to modernize Uzbekistan’s power units at the Syrdarya TPP and the Farkhad HPP with US$177 million and US$56.5 million investments respectively.

Overall, according to the Eurasian Development Bank, between 2016 and 2020, Russia invested about US$9 billion in Uzbekistan. Since early 2000 Russia has amassed a total of US$21.7 billion in direct investment in Central Asian countries, where Uzbekistan has received US$8.9 billion of that amount.

Russian companies are also actively involved in the privatization of Uzbekistan’s state property. In December 2022, conditions were agreed on the sale of a tire plant in Angren to the Russian company Tatneft for US$80 million, while Ural Energy Construction Company bought out a state stake of 58.41% of the shares in the Elektrkishlokkurilish enterprise for nearly US$8.15 million.

Related to these positive developments in bilateral trade and investment dynamics, 2022 also saw a growing volume of remittances to Uzbekistan from abroad (US$17 billion), from which 85%, or US$14.5 billion were sent from Russia, mainly from expatriate workers based in the country. In 2022, more than 567,000 Russian tourists arrived in Uzbekistan, an almost threefold increase compared to 2021.


These statistics illustrate how Russia’s Pivot to Asia is actively having an impact. Far from curbing Russian finances, 18 months on from the onset of the conflict with Ukraine, Russian investment capital is heading east – with Uzbekistan a prime indicator and recipient of these new trade and investment dynamics.

Source: Russia Briefing