Trade - The Times Of Central Asia

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Afghanistan

From Security Threat to Economic Partner: Central Asia’s New ‘View’ of Afghanistan

Afghanistan is quickly becoming more important to Central Asia, and the third week of February was filled with meetings that underscored the changing relationship. There was an “extraordinary” meeting of the Regional Contact Group of Special Representatives of Central Asian countries on Afghanistan in the Kazakh capital Astana. Also, a delegation from Uzbekistan’s Syrdarya Province visited Kabul, and separately, Uzbekistan’s Chamber of Commerce organized a business forum in the northern Afghan city of Mazar-i-Sharif. A Peaceful and Stable Future for Afghanistan The meeting in Astana brought together the special representatives of Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan for Afghanistan. The group was formed in August 2025. There was no explanation for why the fifth Central Asian country, Turkmenistan, chose not to participate. The purpose of the Astana meeting was to coordinate a regional approach to Afghanistan. Comments made by the representatives showed Central Asia’s changing assessment of its southern neighbor. Kazakhstan’s special representative, Yerkin Tokumov, said, “In the past [Kazakhstan] viewed Afghanistan solely through the lens of security threats… Today,” Tokumov added, “we also see economic opportunities.” Business is the basis of Central Asia’s relationship with the Taliban authorities. Representatives noted several times that none of the Central Asian states officially recognizes the Taliban government (only Russia officially recognizes that government). But that has not stopped Kazakhstan and Uzbekistan, in particular, from finding a new market for their exports in Afghanistan. Uzbekistan’s special representative, Ismatulla Ergashev, pointed out that his country’s trade with Afghanistan in 2025 amounted to nearly $1.7 billion. Figures for Kazakh-Afghan trade for all of 2025 have not been released, but during the first eight months of that year, trade totaled some $335.9 million, and in 2024, amounted to $545.2 million. In 2022, Kazakh-Afghan trade reached nearly $1 billion ($987.9 million). About 90% of trade with Afghanistan is exports from Kazakhstan and Uzbekistan. For example, Kazakhstan is the major supplier of wheat and other grains to Afghanistan, and Uzbekistan is the biggest exporter of electricity to Afghanistan. Kyrgyzstan’s trade with Afghanistan is significantly less, but from March 2024 to March 2025, it came to some $66 million. To put that into perspective, as a bloc, the Central Asian states are now Afghanistan’s leading trade partner, with more volume than Pakistan, India, or China. Kazakhstan’s representative, Tokumov, highlighted Afghanistan’s strategic value as a transit corridor that could open trade routes between Central Asia and the Indian Ocean. Kyrgyzstan’s representative, Turdakun Sydykov, said the trade, economic, and transport projects the Central Asian countries are implementing or planning are a “key condition for a peaceful and stable future for Afghanistan and the region as a whole.” The group also discussed humanitarian aid for Afghanistan. All four of these Central Asian states have provided humanitarian aid to their neighbor since the Taliban returned to power in August 2021. Regional security was also included on the agenda in Astana, but reports offered little information about these discussions. A few days before the opening of the meeting in Astana, Russian Ambassador to Kyrgyzstan Sergei...

Economic Growth

Trade Accounted for More Than a Quarter of Kazakhstan’s Economic Growth in 2025

The trade sector accounted for 26% of Kazakhstan’s total economic growth in 2025, according to the Ministry of Trade and Integration. Data from the National Statistics Bureau show that the country’s GDP grew by 6.5% in January-December 2025, equivalent to $20.1 billion in nominal terms, bringing the total size of the economy to $305.9 billion. More than a quarter of this growth was generated by trade. At a government meeting, the Ministry of Trade and Integration reported that domestic trade turnover reached $162.3 billion in 2025, while investment in the sector amounted to $2.6 billion. Non-resource exports totaled $41 billion, and services exports increased by 3.7% to $12.3 billion. Speaking at the meeting, Deputy Prime Minister and Minister of National Economy Serik Zhumangarin said the ministry’s objective is not only to maintain current momentum but also to raise trade to a new level of efficiency and competitiveness. Key priorities include expanding wholesale and retail turnover, increasing the share of domestically produced goods in the market, ensuring stable supplies of socially important products, shortening the supply chain between producers and retailers, boosting exports, and systematically reducing the shadow economy in the trade sector. Special emphasis was placed on measures to curb inflation and ensure adequate food supplies for the domestic market. According to Zhumangarin, a preliminary pool of approximately 1,500 projects has been formed under the “Investment Order” initiative. These projects are aimed at expanding the production of goods with high import dependence, including more than 500 in the agro-industrial complex, over 400 in manufacturing, and the remainder in infrastructure. The ministry’s key task is to secure guaranteed sales channels for products manufactured within these projects. The Times of Central Asia previously reported that trade between Central Asian countries and China exceeded $100 billion in 2025, setting a new record.

Trade

Kyrgyzstan Ready to Act as a ‘Gateway’ for Tajik Goods to EAEU and EU Markets

On February 13 in Bishkek, Chairman of the Cabinet of Ministers of Kyrgyzstan Adylbek Kasymaliev and Prime Minister of Tajikistan Kokhir Rasulzoda held the first meeting of the Kyrgyz-Tajik Intergovernmental Council. Opening the session, Kasymaliev said that 2025 marked a historic milestone in bilateral relations, citing the completion of the delimitation process of the Kyrgyz-Tajik border. He described the agreement as “a decisive factor in strengthening security and stability not only in our countries but also in the entire region.” Addressing trade and economic cooperation, Kasymaliev stated that Kyrgyzstan is ready to expand supplies of meat and dairy products, clothing and textiles, coal, glass, and sugar to Tajikistan. According to official figures, bilateral trade turnover reached $36 million in 2025, representing a nearly 24-fold increase compared to 2024. Both sides have set a target of increasing annual trade to $500 million. In the field of transport and logistics, Kasymaliev emphasized the need to improve border infrastructure and enhance the efficiency of checkpoints. Proposed measures include modernizing existing border crossings, expanding capacity, developing logistics and cargo terminals, and introducing digital solutions in customs and border administration. “Kyrgyzstan is ready to act as a trade gateway for Tajik goods to the markets of the Eurasian Economic Union (EAEU), as well as the European Union through the Generalised Scheme of Preferences Plus (GSP+),” Kasymaliev said. He also highlighted the strategic China-Kyrgyzstan-Uzbekistan railway project, which he said would significantly increase Kyrgyzstan’s transit potential and strengthen its role as a logistics hub in Eurasia. According to the Kyrgyz prime minister, the new transport corridor will create additional opportunities for Tajikistan. Kasymaliev further noted positive dynamics in tourism cooperation. In 2025, 86,000 tourists from Tajikistan visited Kyrgyzstan, a 12-fold increase compared to 2024. Kyrgyzstan reaffirmed its interest in developing joint tourism initiatives, including the possible introduction of a unified visa for third-country nationals traveling across Central Asia. Rasulzoda stated that Tajikistan places particular importance on good-neighborly relations and mutually beneficial cooperation with Kyrgyzstan, confirming readiness to further strengthen the partnership. As part of his visit to Bishkek, Rasulzoda toured a recently opened waste-to-energy plant constructed by a Chinese company. He described the facility as a promising example of modern waste recycling and expressed Tajikistan’s interest in implementing similar projects.

Electricity

Central Asia Launches Regional Electricity Market with World Bank Support

On January 22, the World Bank’s Board of Executive Directors approved the 10-year Regional Electricity Market Interconnectivity and Trade (REMIT) Program, an ambitious initiative to establish Central Asia’s first regional electricity market. The program aims to boost cross-border electricity trade, expand transmission capacity, and lay the foundation for large-scale renewable energy integration across the region. Electricity demand in Central Asia is projected to triple by 2050 under a business-as-usual scenario. Yet electricity trade in the region currently accounts for only 3% of total demand. The REMIT Program seeks to harness Central Asia’s diverse and complementary energy resources: hydropower in Kyrgyzstan and Tajikistan, thermal power from coal and natural gas in Kazakhstan, Turkmenistan, and Uzbekistan, and the region’s rapidly expanding solar and wind potential. Over the next decade, REMIT aims to: Increase regional electricity trade to at least 15,000 GWh annually, enough to supply millions of consumers Triple regional transmission capacity to 16 GW Enable up to 9 GW of clean energy integration The initiative is designed to enhance regional energy security, reduce power outages, lower electricity costs, and promote a more resilient and interconnected grid system. Total indicative financing for the program is $1.018 billion, to be deployed in three phases. These funds will support the creation and operation of a regional energy market, boost transmission infrastructure, introduce digital technologies to improve grid reliability, and strengthen regional energy institutions and coordination mechanisms. Investments are also expected to generate both construction-related employment and high-skilled jobs tied to market operations. In the program’s first phase, Kyrgyzstan, Tajikistan, Uzbekistan, and the Central Asian Countries’ Coordinating Dispatch Center (CDC) Energia will benefit from grants and concessional financing totaling $143.2 million. This comprises $140 million from the World Bank’s International Development Association (IDA) and $3.2 million from the Central Asia Water and Energy Program (CAWEP). “The REMIT Program supports Central Asian countries’ ambition to deepen energy cooperation and create a regional electricity market,” said Najy Benhassine, World Bank Regional Director for Central Asia. “This will enable more efficient use of energy resources, including cross-border deployment of clean energy, improve access to reliable and affordable electricity, and support jobs. By 2050, stronger regional connectivity could generate up to $15 billion in economic benefits.” Charles Cormier, World Bank Regional Infrastructure Director for Europe and Central Asia, added that REMIT will advance energy security and unlock private sector investment. “The first phase alone is expected to enable about 900 MW of new clean energy capacity, leveraging $700 million in private investment. This will pave the way for a more resilient and interconnected power system across this dynamic region,” he said. CDC Energia will lead the implementation of market and institutional activities, while national transmission companies will be responsible for infrastructure investments.

Trade

Uzbekistan Signals Possible Retaliation Over Increased Trade Costs in Tajikistan

Uzbekistan may introduce reciprocal measures in response to trade barriers impacting its exports to Tajikistan, Deputy Prime Minister Jamshid Khodjaev announced on January 17 during a meeting of entrepreneurs, ambassadors, and government officials in Tashkent. Khodjaev highlighted challenges faced by Uzbek exporters, particularly in the construction materials sector, despite full compliance with required documentation. “We have problems related to Tajikistan. We export products to this market, but even when all documents are complete, our goods are cleared under a so-called ‘reserve’ procedure,” he said. “As a result, the price of our products in that market rises by about 15%.” Meeting participants reported that additional charges imposed at Tajik customs are inflating the cost of Uzbek construction materials and reducing competitiveness. Khodjaev warned that if such restrictions are not lifted, Uzbekistan may respond with similar trade measures. The issue was also raised by representatives of German construction materials giant Knauf. The company’s commercial director noted that exporters face similar obstacles not only in Tajikistan but also in Turkmenistan and parts of the Caucasus region. In Tajikistan’s case, the “reserve” customs clearance procedure was cited as a key driver of increased costs. “This is pushing the price of our products in the Tajik market up by as much as 15%,” the representative said. Entrepreneurs stated that combined logistics and customs costs for shipments to Tajikistan have surged from approximately $2,000 to $12,000. Despite multiple appeals to Tajik authorities, they said no resolution has been achieved, and the elevated costs are undermining export volumes. “If they impose duties, we can do the same,” Khodjaev stated. “Our customs officials will talk to their counterparts. If this practice continues, we will take response measures. Our ambassador should clearly convey this signal.” Despite the ongoing friction, trade between Uzbekistan and Tajikistan surpassed $700 million in 2024, nearly three times higher than in previous years. Both governments have indicated they are exploring new logistics corridors and simplified customs procedures to deepen bilateral economic ties.

Trade

Central Asia Trade with China Tops Record $100 Billion in 2025

Trade between China and Central Asia increased to a record of more than $100 billion in 2025, despite challenges to global economic growth, the Chinese government said on Monday. Citing data from China’s General Administration of Customs, Foreign Ministry spokesman Guo Jiakun said the trade structure with the Central Asian nations of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan had improved and that more high-end products were entering the Chinese market from the region. “As global economic growth remains sluggish and the international trading system faces serious challenges, the economic and trade cooperation between China and Central Asian countries has withstood external headwinds, and the trade volume surpassed US$100 billion,” Guo said. He attributed the increasing cooperation in part to a China-Central Asia summit in Astana, Kazakhstan last year that was attended by Chinese President Xi Jinping and the five Central Asian leaders. China’s Belt and Road initiatives, which include the development of trade routes that pass through Central Asia and link up with Europe, are also making progress, according to the Chinese official. Total trade between China and Central Asia was $106.3 billion in 2025, an increase of 12 percent over the previous year, China’s state-run Xinhua news agency reported. Chinese exports such as machinery, electronics and high-tech goods were $71.2 billion, an increase of 11 percent over the previous year. Imports from Central Asia amounted to $35.1 billion, a rise of 14 percent from 2024. China is involved in major projects in Central Asia, including the extraction of minerals used for “clean” technology, equipment manufacturing and the modernization of agriculture. China imports oil and natural gas as well as a growing number of other products from the region. Russia was once the main trading partner of Central Asia after the fall of the Soviet Union, but China has the lead position now. The United States is also seeking to develop more trade with resource-rich Central Asia, which is diversifying its international partnerships.