Uzbekistan's New Leather Policy: A Strategic Shift from Raw Material Export to Finished Goods Manufacturing

Uzbekistan's leather industry is undergoing a strategic overhaul with a new presidential decree targeting $150 million in exports by 2027, up from $110 million in 2026. This 36% growth goal signals a clear shift from raw material exports to finished goods manufacturing, addressing the country's long-standing issue of low-value-added primary material sales.

Core Policy: Quantified Targets and Long-Term Incentives The policy sets specific production targets: 8 million square meters of finished leather and 115 million pairs of shoes by 2027. To achieve this, the government has introduced a tax exemption on the procurement of raw leather and wool, effective until July 2029. This long-term stability aims to reduce enterprise costs and encourage local processing. Additionally, production subsidies and support for importing essential components like shoe lasts and molds are provided, along with retail rent compensation to ease operational burdens.

Industrial Platforms and Infrastructure Beyond short-term relief, the policy focuses on long-term development. A dedicated management body for leather and footwear industrial zones will be established, backed by $23 million in capital, to oversee park operations and investment attraction. From October 2026, funds will be allocated for three key areas: upgrading wastewater treatment facilities, improving industrial park infrastructure, and training technical personnel. These measures are designed to enhance environmental compliance and address skill shortages, strengthening the industry's global competitiveness.

Impact on Global Supply Chains For international buyers and footwear manufacturers, Uzbekistan is emerging as a cost-competitive sourcing destination. The combination of abundant livestock resources, policy incentives, and improving infrastructure could lead to significant capacity expansion in the next 2-3 years. This may offer an alternative to traditional leather hubs like China, Italy, and Turkey, particularly for mid-to-low-end products. However, buyers should verify product quality and delivery reliability as the industry matures.

Practical Recommendations

For Buyers - Monitor the production ramp-up of finished leather and footwear in Uzbekistan and engage with park-based suppliers for samples and pricing. - Leverage the raw material tax exemption to compare cost advantages against existing supply chains. - Verify environmental compliance of potential suppliers to avoid future trade barriers.

For Trading Companies - Connect with industrial zone authorities to explore joint venture or factory setup opportunities. - Target the export of production equipment and components like shoe lasts, benefiting from import subsidy policies. - Incorporate policy incentives into pricing strategies to gain a competitive edge in the Central Asian market.