Uzbekistan Business & Economy - The Times Of Central Asia

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Aviation

Uzbekistan Becomes Top International Destination for Russian Airlines

Uzbekistan has become the leading international destination for Russian airlines in the summer 2026 schedule, with flights planned on 67 routes between the two countries, according to data reported by ATO.ru, citing Russia’s aviation authority, Rosaviatsiya. The figures show Uzbekistan surpassing other popular destinations for Russian carriers, including China and Turkey, by a significant margin. Flights to Uzbekistan will operate on 10 more routes than to China and 12 more than to Turkey. Other traditional leisure destinations, such as Thailand and Egypt, will see considerably fewer routes, with 35 and 33 respectively. According to the report, this marks a major shift compared to pre-pandemic travel patterns. In 2019, Uzbekistan ranked ninth among international destinations for Russian airlines, with passenger traffic totaling around 1.24 million people, well behind Turkey and China. The growing number of routes reflects strong demand for travel between the two countries. Analysts attribute this to labor migration, as well as expanding business and tourism ties. Uzbekistan has also gained importance as a transit hub, particularly as Western airspace restrictions now limit routing options for Russian carriers. Tashkent, in particular, has emerged as a key connection point for long-haul travel, including flights to the United States. Uzbekistan Airways remains the only Central Asian carrier operating transatlantic flights to New York. The trend is mirrored on the Uzbek side. According to earlier estimates by Lufthansa Consulting cited in the report, Russia accounted for 49% of Uzbek airlines’ passenger traffic in 2019, rising to 52% by 2022. In the current summer schedule, Uzbekistan Airways operates flights to 19 Russian cities, while private carriers such as Centrum Air and Qanot Sharq serve multiple destinations, including Moscow and St. Petersburg. A new airline, FlyOne Asia, is also expected to launch services on five routes from Tashkent to Russian cities. Previously, The Times of Central Asia reported that Uzbekistan Airways continues to maintain regular operations on Russian routes, including a January incident in which a Boeing 767 flying from Tashkent to Vladivostok made a safe emergency landing in Krasnoyarsk.

Fuel Prices

Central Asia Avoids Fuel Shock as Global Pressures Build

Central Asia has so far avoided the immediate fuel shocks spreading across much of the world following the U.S. and Israel’s war with Iran. There are no lines at gas stations, no visible shortages, and no signs of panic buying. But that stability sits within a rapidly tightening global market, where disruptions in Asia and policy responses in Europe are reshaping fuel flows in ways the region will struggle to avoid. Across Southeast Asia, governments are already taking precautionary steps. Some state agencies and private firms are shifting parts of their workforce to remote work to reduce fuel consumption and prepare for potential price spikes and logistics disruptions, while Thailand is preparing contingency measures, including possible fuel rationing. China, one of Asia’s largest suppliers of refined fuels, has moved to restrict exports of gasoline, diesel, and jet fuel in an effort to prevent domestic shortages linked to the war. The move is expected to tighten supplies across Asia, especially for countries that rely on Chinese fuel imports. China supplied about one-third of Australia’s jet fuel last year, highlighting the wider regional impact, and roughly half of the Philippines’ and Bangladesh’s in 2024. Vietnam has already warned airlines to prepare for flight reductions in April due to the risk of shortages caused by these export restrictions. Indonesia is also imposing limits on fuel sales. Fuel-related pressures have begun to emerge in Europe as well. Poland has introduced tax measures aimed at reducing fuel prices, with the government saying this will lower prices for consumers. Slovenia, meanwhile, has introduced significant restrictions on fuel consumption. Under new rules, private motorists are limited to purchasing a maximum of 50 liters per day, while businesses and farmers may purchase up to 200 liters daily. The combined effect of war-driven energy shocks and renewed tariff barriers is raising global costs and adding pressure across trade, transport, and inflation. Against this backdrop, Central Asia’s apparent stability is misleading. It is highly unlikely that import-dependent states such as Kyrgyzstan and Uzbekistan will be as well protected as Kazakhstan, which may benefit in the short term from higher crude prices. Starting April 1, Russia is banning gasoline exports in an effort to stabilize its own domestic market. Russia is a key fuel supplier to Central Asia. However, according to assurances from the Ministry of Energy of the Russian Federation, the temporary export ban will not affect supplies to Uzbekistan. Deliveries under intergovernmental agreements are expected to continue, ensuring that at least part of the region’s supply remains uninterrupted. In Kyrgyzstan, despite recent developments, fuel prices and supplies remain relatively stable. The government is considering lowering taxes or temporarily waiving excise duties for fuel importers should the crisis continue. Information from Turkmenistan is difficult to verify independently. Despite reports of fuel shortages at gas stations last year, official media are now indicating a significant increase in domestic gasoline production. The production plan for January-February 2026 was reportedly fulfilled at 122.7%, according to Deputy Chairman of the Cabinet of Ministers Guvancha...

Afghanistan

Uzbekistan and Afghanistan Establish Business Council to Boost Trade

Uzbekistan and Afghanistan have established a joint Business Council aimed at strengthening trade and economic cooperation, according to Uzbekistan’s Chamber of Commerce and Industry. The council was formally launched on March 26 during a meeting in Tashkent attended by a delegation led by Mohammad Karim Hashimi, chairman of the Afghanistan Chamber of Commerce and Investment. The inaugural session brought together representatives from both countries’ business communities and relevant institutions. The council comprises 32 members. On the Uzbek side, participants include officials from the Chamber of Commerce and Industry and representatives of sectoral associations. The Afghan delegation includes members of the Chamber of Commerce and Investment as well as executives from leading private companies. Discussions focused on expanding bilateral trade, fostering direct business-to-business cooperation, and launching new joint projects. Priority sectors identified for collaboration include construction materials, pharmaceuticals, food production, textiles, electrical engineering, and petroleum products. Both sides set a target of increasing bilateral trade to $5 billion in the near term. To support this goal, they agreed on several priority measures, including expanding export capacity, introducing digital customs systems, improving financial and insurance services, and increasing transparency in trade procedures. Participants also emphasized the importance of regularly organizing exhibitions, business forums, and business-to-business meetings to strengthen ties between entrepreneurs and facilitate partnerships. Chairman of Uzbekistan’s Chamber of Commerce and Industry, Davron Vakhobov, highlighted the significance of the initiative, noting that it would help establish direct dialogue between businesses, create new partnerships, and boost investment activity. The creation of the Business Council builds on recent growth in economic ties between the two countries. Uzbekistan has described its relationship with Afghanistan as “friendly and constructive,” with bilateral trade reportedly increasing 2.5 times over the past five years-from $653 million in 2021 to $1.7 billion in 2025.

Islamic Finance

Uzbekistan Targets $50 Billion in Investment with Financial Reforms

Uzbekistan is preparing to introduce Islamic finance services nationwide, with the first offerings expected in 2027. Under the country’s updated “Uzbekistan 2030” development strategy, at least three commercial banks are expected to provide Sharia-compliant financial services by the end of the decade, marking a significant shift in the structure of the banking sector. Against this backdrop, President Shavkat Mirziyoyev was briefed on March 25 on a broader set of initiatives aimed at strengthening the country’s investment climate. These include plans to establish the Tashkent International Financial Center, launch an International Center for Digital Technologies, and gradually introduce Islamic finance mechanisms. The presentation comes as Uzbekistan seeks to position itself more competitively in the global economy amid rising geopolitical uncertainty and intensifying competition for foreign investment. Officials said the country’s natural resources, economic potential, and ongoing reforms create favorable conditions for attracting international companies exploring new markets. Mirziyoyev stressed the need to act swiftly to capitalize on emerging opportunities, noting that attracting foreign investors requires modern infrastructure, a transparent business environment, and legal systems aligned with international standards. Uzbekistan aims to attract more than $50 billion in investment this year. A central component of the strategy is the Tashkent International Financial Center, which is expected to serve as a platform for new investment flows and long-term economic growth. By 2030, it is projected to attract an additional $20-25 billion, contribute up to 1% of annual GDP growth, and create as many as 15,000 highly skilled jobs. The center will operate under a special legal regime incorporating elements of the common law system of England and Wales, while allowing its governing bodies to adopt independent regulations. Plans include the establishment of a Tashkent International Commercial Court and an International Arbitration Center to handle disputes. Investors are expected to benefit from tax incentives, simplified visa procedures, and the ability to freely move and repatriate capital, alongside access to modern financial instruments, including digital assets. In parallel, Uzbekistan is developing the International Center for Digital Technologies under the Enterprise Uzbekistan brand. The center will function under a special legal framework expected to remain in place until 2100. Within a regulatory sandbox, companies will be able to test new technologies, pay salaries in foreign currency, and operate under international labor and data standards. The digital center will focus on artificial intelligence, data processing, research and development, and startup support. By 2030, it is expected to attract up to 1,000 companies, create more than 300,000 jobs, and generate export revenues of up to $5 billion. Several major international technology firms have already expressed interest in the initiative. The introduction of Islamic finance is another key pillar of the reform agenda. The proposed system includes instruments such as murabaha, mudarabah, musharakah, and Islamic leasing, all designed to comply with national legislation. Tax measures are also under consideration, including exemptions on certain transactions and investment income. To oversee the sector, an Islamic Finance Council will be established under the Central Bank, with similar bodies to be created within...

Nuclear Power Plant

Uzbekistan Nuclear Project Could Bring Russia Orders Worth $22 Billion

Uzbekistan’s first nuclear power plant, based on small modular reactor (SMR) technology, has entered a new phase, with initial construction, including concrete works, beginning at the site in the Farish district of the Jizzakh region on March 24. The project is part of Uzbekistan’s long-running plan to diversify its energy mix and reduce reliance on gas-fired power generation. The milestone was marked by parallel ceremonies held in Tashkent and at the construction site. During the events, Uzbekistan’s nuclear energy agency Uzatom and Russia’s state nuclear corporation Rosatom signed several key documents, formally advancing the project to the implementation stage. These included a cooperation roadmap covering nuclear and related sectors, as well as an addendum to the contract for building an integrated nuclear power facility in Uzbekistan. The documents were signed by Uzatom Director Azim Akhmedkhadjaev and Rosatom Director General Alexey Likhachev. Speaking to reporters, Likhachev said the project could also have significant economic benefits for Russia. According to the Russian news agency TASS, he stated that construction of even a small reactor unit at the Uzbek site could generate orders worth up to $22 billion for Russian companies. He added that the project could create around 1,000 jobs in Russia. Likhachev also outlined broader potential economic returns, saying that for every ruble invested during construction, up to 1.5 rubles could be returned to the Russian economy, rising to as much as two rubles during the plant’s operational phase.

Nuclear Power Plant

Uzbekistan Launches First Concrete Works at Planned Nuclear Power Plant

Construction of Uzbekistan’s first nuclear power plant has entered a new phase, with initial concrete works officially launched at the project site in the Farish district of the Jizzakh Region, according to the country’s Atomic Energy Agency, Uzatom. The milestone was marked on March 24 during simultaneous ceremonies held in Tashkent and at the construction site. During the events, Uzatom and Russia’s state nuclear corporation Rosatom signed a number of strategic documents, formally advancing the project to the stage of practical implementation. Among the agreements were a cooperation roadmap covering nuclear and related sectors, as well as an addendum to the contract for the construction of an integrated nuclear power facility in Uzbekistan. The documents were signed by Uzatom Director Azim Akhmedkhadjaev and Rosatom Director General Alexey Likhachev. According to Uzatom, the roadmap outlines cooperation in areas such as project implementation phases, workforce training, public engagement on nuclear energy, and the development of infrastructure for a future town for plant personnel. Uzbek officials said the agreement establishes a comprehensive partnership expected to contribute to both economic and social development. At the construction site, work has begun on laying the concrete foundation beneath the reactor building for a small modular unit using the RITM-200N design. Approximately 900 cubic meters of concrete are scheduled to be poured, with this stage expected to be completed by April 2026. The foundation will incorporate the waterproofing and grounding systems required for the reactor structure. The updated configuration of the plant involves two large power units equipped with Generation III+ VVER-1000 reactors, as well as two smaller units using RITM-200N reactors, each with a capacity of 55 MW. Once fully operational, the facility is expected to generate around 15.4 billion kilowatt-hours of electricity annually, more than 15% of Uzbekistan’s current power consumption. Uzatom stated that regulatory approval for use of the site has already been granted following safety assessments that identified no significant risks related to seismic activity, tectonic faults, or karst formations. The agency said the location meets nuclear, environmental, and technical safety requirements. “The start of concrete works marks an important step in implementing Uzbekistan’s national nuclear energy program,” Akhmedkhadjaev said, adding that the project is proceeding in line with established timelines and safety standards. Separately, Uzatom confirmed that a mission from the International Atomic Energy Agency is expected to visit Uzbekistan in the second half of 2026 to assess progress on the project.