Uzbekistan's leather industry is moving away from a 'raw materials for foreign exchange' model. A recent presidential resolution introduces a full-chain policy covering raw material procurement, manufacturing, industrial parks, environmental upgrades, and talent training, targeting finished product exports of $150 million by 2027—a 36% increase from the 2026 estimate of $110 million. This is not just a numerical jump but a fundamental shift in industrial logic.
From Raw Material Export to Finished Product: A Policy-Driven Transformation
For years, Uzbekistan has been rich in cattle and sheep hides and wool, but insufficient processing capacity led to large-scale export of low-value raw materials. The new policy aims to break this cycle. Official plans call for leather finished product output to reach 8 million square meters and footwear production to exceed 115 million pairs by 2027. These targets are designed to encourage local enterprises to process domestic livestock materials and retain value within the country.
For buyers, this means a new wave of scaled leather and footwear suppliers will emerge in Central Asia over the next two years. The traditional trade model—buying raw hides from Uzbekistan for processing elsewhere—may face structural changes as finished product supply increases and raw material exports tighten.
Long-Term Tax Benefits and Subsidies: Systematic Cost Reduction
The policy offers substantial cost-side benefits. A tax exemption on the purchase of leather and wool raw materials will run until July 2029, providing years of stable expectations that lower procurement costs and encourage deeper processing. Additionally, imports of core production accessories like shoe lasts and molds will receive special subsidies, directly reducing the barrier to equipment upgrades.
Notably, the introduction of retail rent compensation means the policy supports not only production but also market access. Reduced operating costs for physical stores may accelerate the expansion of local Uzbek footwear brands, creating competitive pressure on imported shoes.
Industrial Parks and Environmental Upgrades: Addressing Infrastructure and Talent Gaps
Long-term industrial foundations are another key focus. The government will establish a dedicated management body for leather and footwear industrial zones, backed by $23 million in capital for park operations, investment promotion, and enterprise services. Physical clustering of upstream and downstream players is expected to boost overall efficiency and reduce logistics and ancillary costs.
Starting in October 2026, special funds will be directed to three core areas: upgrading enterprise wastewater treatment facilities, improving industrial park infrastructure, and systematic training of technical professionals. The environmental investment is particularly critical—international buyers increasingly demand supply chain compliance, and inadequate wastewater treatment is often a hidden barrier for developing-country leather products entering Western markets. By proactively addressing this, Uzbekistan is clearing the path for future exports.