Cross-Border Trade - The Times Of Central Asia

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Dostuk International Trade and Economic Park

Trade and Economic Park Planned at Border of Kyrgyzstan, Tajikistan, and Uzbekistan

On May 6, Kyrgyz President Sadyr Japarov visited the Dostuk Stele (Friendship) in the country’s southwestern Batken region, erected at the junction point of the state borders of Kyrgyzstan, Tajikistan, and Uzbekistan, where he reviewed the concept and master plan for the proposed Dostuk International Trade and Economic Park. During a summit in the northern Tajik city of Khujand on March 31, 2025, Presidents Sadyr Japarov of Kyrgyzstan, Emomali Rahmon of Tajikistan, and Shavkat Mirziyoyev of Uzbekistan signed a historic agreement on the junction point of the three countries’ state borders. The leaders also took part in a remote inauguration ceremony for the Friendship Stele, which marks the exact location where the borders of the three countries meet and symbolizes friendship among the three nations, the resolution of long-standing border issues, and a new stage of regional cooperation. The planned Dostuk International Trade and Economic Park would span 100 hectares and include administrative, tourism, logistics, production, commercial, and recreational zones. The project aims to strengthen trade and logistics links, attract investment, and create new economic opportunities. If implemented, the project is expected to create more than 5,000 jobs and increase cross-border trade. The concept also includes the development of tourism infrastructure and the organization of international cultural events, ethnic festivals, and exhibitions, contributing to stronger cultural and humanitarian ties while promoting the historical heritage of the Silk Road. Japarov said good-neighborly relations among Kyrgyzstan, Tajikistan, and Uzbekistan remain important, citing the role of joint infrastructure and economic initiatives in regional stability and sustainable development. He also expressed confidence that, with mutual support from the three neighboring countries, the project could become a major platform for trade and investment, as well as a symbol of peace, trust, and unity among the peoples of Central Asia.

U.S. Sanctions

U.S. Waiver of Sanctions on Iran’s Chabahar Port is Good News for Central Asia

U.S. sanctions on Iran’s Chabahar Port on the Gulf of Oman have been on again/off again since 2013, when the U.S. Congress passed the Iran Freedom and Counter-Proliferation Act (IFCA) to curb Iran’s regional influence and strategic capabilities through targeted economic pressure, aka sanctions. In the decade following IFCA’s passage, Washington’s sanctions on Chabahar had a negative impact on Central Asia, largely by complicating its efforts to deepen economic ties with South Asia and the Gulf. But geopolitics are shifting. Washington is increasing its involvement in Central Asia and India, and is doing the same in Afghanistan. These factors may well induce the U.S. Department of State to keep the waiver in place. Washington first waived its sanctions on Chabahar in 2018—a strategic move to support India's role in Afghanistan's post-war development and to provide a crucial trade route for that landlocked country. Six years later, India's Indian Ports Global Limited secured a 10-year deal with Iran to manage Chabahar port, in part, to offset Pakistan’s Gwadar port at the end of the China-Pakistan Economic Corridor, a mere 100 miles from Chabahar. For all the fanfare, Central Asia held little real priority in Washington in those years. Seven years later, the U.S. changed course. It announced on September 16, 2025, much to Central Asia’s surprise and concern, that “the State Department has revoked the sanctions exception issued in 2018 under the IFCA”, making individuals involved in Iran’s Chabahar port operations subject to penalties, resulting in another snag in Central Asia’s desire for a southern breakout route. And then, in a swift reversal, the U.S. restored India’s sanctions waiver some six weeks later, on October 30. Whatever might explain the sudden change, Central Asia breathed a sigh of relief, and, by all accounts, now feels confident that the waiver will be evergreened. Time will tell if this confidence is justified. The U.S. waiver enables India to work to enhance Chabahar’s infrastructure and functionality, offering Central Asian exporters a more direct and profitable trade route than those via China, Russia, or the Middle Corridor, which stretches from East Asia to Europe via Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, and Türkiye. As a result, goods like minerals, cotton, and energy products can reach regional and global markets faster. Central Asian capitals are quietly reveling in Washington’s flexible realpolitik in the face of convulsive U.S.-Iranian relations and heated Indo-Pakistan tensions. Without fear of punitive measures, India can now continue its work at Chabahar. To be sure, the waiver affirms India’s rising global presence and accelerates New Delhi’s drive into Central Asia, including Afghanistan. Washington’s decision signaled to traders, investors, and think tankers that it has no intention of spoiling India’s export ambitions and Central Asia’s desire for north-south economic integration. The waiver shows Washington’s pragmatism—and is welcomed by those who have little or no use for Washington’s penchant for foreign policy moralism. Chabahar Port complements not only the Trans-Caspian corridor—a multimodal trade route connecting Asia and Europe by linking China to Europe through Central...

Water Management

Kazakhstan, Kyrgyzstan, and Uzbekistan Agree on Joint Water and Energy Measures

Kazakhstan, Kyrgyzstan, and Uzbekistan have reached a landmark agreement on coordinated water and energy management, signaling a deepening commitment to cross-border cooperation amid growing seasonal and climate-related challenges. The agreement was formalized on September 7 in Cholpon-Ata, Kyrgyzstan, during a meeting of energy ministers and water management authorities from the three countries. The protocols define mutual obligations for water releases and electricity exchanges, with the goal of balancing the region’s energy needs and preserving critical water resources. Under the terms of the agreement, Kyrgyzstan will release water from the Toktogul Hydroelectric Power Plant (HPP) reservoir to downstream Kazakhstan and Uzbekistan. In return, Kyrgyzstan will receive electricity from both countries through spring 2026. According to the Kyrgyz Ministry of Energy, the arrangement is designed to optimize the use of water stored in Toktogul and to secure reliable electricity supplies for Kyrgyzstan during the 2025-2026 autumn-winter period. Regional Power Transit Agreements The protocols also include provisions for cross-border electricity transit: from Russia to Kyrgyzstan via Kazakhstan’s grid, and from Turkmenistan to Kyrgyzstan through Uzbekistan’s transmission network. The Toktogul HPP, situated on the Naryn River, a major tributary of the Syr Darya, is Kyrgyzstan’s largest power facility, generating roughly 40% of the country’s electricity. It serves a dual function: providing domestic energy and regulating water flows that are essential for irrigation in downstream Kazakhstan and Uzbekistan. In winter, Kyrgyzstan often increases power output from Toktogul to meet heating demand, but this can significantly lower reservoir levels, jeopardizing irrigation supplies the following spring. The new agreement is intended to reduce this risk by enabling Kazakhstan and Uzbekistan to supply electricity during peak winter months, allowing Kyrgyzstan to conserve water. Kazakhstan’s Ministry of Energy emphasized that the trilateral deal is crucial to maintaining water levels in Toktogul and ensuring sufficient irrigation for southern Kazakhstan during the next growing season. Broader Regional Energy Cooperation Separately, Kazakhstan and Uzbekistan signed an agreement for the supply of approximately 900 million kilowatt-hours of electricity between March and December 2026. The electricity is expected to cover anticipated shortages in Kazakhstan’s southern power grid and further underscores the growing interdependence of Central Asia’s energy and water systems.

Israel-Iran Escalation

Israel Strikes Mashhad, an Iranian City Near Turkmenistan and a Hub for Central Asia Trade

Mashhad, a northeastern Iranian city near the border with Turkmenistan and a significant hub for trade with Central Asia, is among the targets hit by the Israeli military in the intensifying conflict between Israel and Iran. The Israeli military said a strike on Mashhad’s airport on Sunday was the furthest since it launched airstrikes on Iran, including nuclear facilities, on June 13 and Iran promptly retaliated. The attack on the city highlights the potential fallout for some countries in Central Asia that do business with Iran across the border with Turkmenistan. “The IAF (Israeli Air Force) struck an Iranian refueling aircraft at Mashhad Airport in eastern Iran, approximately 2,300 kilometers from Israel. The IAF is operating to establish aerial superiority over Iranian airspace. This marks the longest-range strike conducted since the beginning of Operation Rising Lion,” the Israeli military said on X. Mashhad, which has a population of up to 3.5 million, is Iran’s second most populous city after the capital Tehran, which has nearly 10 million people. The northeastern city is an Islamic pilgrimage site and is the birth place of Ayatollah Ali Khamenei, Iran’s supreme leader. U.S. President Donald Trump said on social media on Tuesday that “we know exactly” where Ayatollah Khamenei is hiding and that he is an “easy target” even if he is safe for now. Trump has also demanded Iran’s “unconditional surrender,” though it was unclear whether his comments meant the U.S. could directly join Israel’s military campaign against Iran. While the whereabouts of Iran’s supreme leader are not publicly known, Mashhad and other major Iranian cities have been thrown into turmoil by the Israeli attacks. Some people have fled to other towns or places in the countryside that they think might be safer. Flights have been canceled and there are reports of widespread internet disruptions. Mashhad is about 75 kilometers from the nearest point on the border with Turkmenistan, and a driving distance of about 275 kilometers to Ashgabat, Turkmenistan’s capital to the northwest. Last month, Iran and Turkmenistan signed an agreement aimed at increasing bilateral trade to $3 billion, the Tehran Times reported. The neighbors also agreed to establish joint free trade zones, build up border markets, ready a bilateral gas contract and take other steps to develop economic cooperation. In April, Iran and Turkmenistan agreed to start a cross-border passenger train as a way to strengthen economic ties. The route would link Mashhad with Merv, a city in Turkmenistan. The extent of disruption to these economic plans is unclear as fighting between Israel and Iran continues. Fears of a wider war are circulating and numerous countries, including those in Central Asia, have appealed for an end to hostilities.