Contents hide
1 Overview
2 Imports and Exports Profile
2.1 Imports
2.2 Exports
2.3 Increasing exports to Uzbekistan
3 Trade Framework Between Uzbekistan and Pakistan
3.1 Bilateral relations
3.2 Regional Agreements
3.2.1 Shanghai Cooperation Organization (SCO)
3.2.2 Economic Cooperation Organization (ECO)
4 Recent Developments
5 Key Institutions

Overview

The Republic of Uzbekistan is a Central Asian country that serves as one of two doubly land-locked countries in the world, bordered by 5 land-locked countries. The country holds the largest population in Central Asia, standing at 34.2 million, with a GDP per capita of $1,751.

The Uzbek economy is one that is agriculture-oriented, with natural resources dominating the country’s exports due to its status as a producer of oil, natural gas and gold, and as the second largest exporter of cotton globally. The country’s top products were identified to include citrus fruits, chopped rice, knitwear, vegetables, sheep and goatskins, jerseys, and similar fabrics. The unrealized export potential of its fruit and vegetable economy estimates at 70%, with a high potential for increased exports of carrots, turnips, peppers, eggplants, and onions, amongst others. There is further export potential for its textile industry, automotive industry, and non-ferrous metallurgy, and chemical industry products.

As of 2019, Uzbekistan was labelled the 78th largest export economy in the world, with its global exports worth $15 billion and global imports of $22 billion, resulting in a trade deficit of $7 billion. Uzbekistan’s top 10 export and import countries of 2019 are highlighted in Figures 1.1 and 1.2 below respectively.

 

Imports and Exports Profile

 

Imports

In 2019, Uzbekistan received imports worth $32.5M from Pakistan, where the main product received were packaged medicaments ($10M), tropical fruits ($3.73M), and citrus ($2.66M). The categories of products imported include vegetable products constituting 41.8% of imports from Pakistan, chemical products at 41.3%, textiles at 7.45%, metals at 3.7%, foodstuffs at 1.8%, machines at 1.5%, plastics and rubbers, medical instruments, footwear, animal hides, stone and glass, and animal, wood and mineral products. In 2020, Uzbekistan’s imports from Pakistan constituted US $25.21M, according to the United Nations COMTRADE database on international trade. The major products imported from Pakistan in 2020 have been highlighted in Figure 2.1 below

Imports from Pakistan in 2020


Exports

In 2019, Uzbekistan exported $95.6 million to Pakistan, where the main products exported were dried legumes ($73.5 million) constituting 76.9% of products exported to Pakistan, non-retail pure cotton yarn ($10 million) at 10.5%, and onions ($5.19 million) at 5.42%. Other major exports included buckwheat at 2.48%, and metals and mineral products at 3.34%. In 2020, Uzbekistan’s exports to Pakistan constituted $96.95 million, according to the United Nations COMTRADE database on international trade. The major products exported to Pakistan in 2020 have been highlighted in Figure 2.2 below.


Exports to Pakistan 2020

Increasing exports to Uzbekistan

From Pakistan’s perspective the country needs to focus on increasing its exports of pharmaceutical products, wheat, potatoes, sugar, surgical instruments, bananas, lead-acid accumulators and milled rice to Uzbekistan. Pakistan also has a great export potential for exporting medicaments, medical instruments and inflatable balls to Uzbekistan. Other products for which a market can be developed in Uzbekistan include Portland cement, polyethylene, parts of gas turbines, vegetable fats, food preparations and products of iron.

Pakistan may also adopt alternatives for shipping consignments to ease the export process from Pakistan to Tashkent, Uzbekistan, which include:

  1. The lowest cost shipping alternative
    • From Lahore to Tashkent: gives a freight rate index of 4,406, a transit time estimate of 3.7 days and a carbon dioxide emission index of 2,334
    • From Karachi to Tashkent: gives a freight rate index of 6,615, a transit time estimate of 5.2 days and a carbon dioxide emission index of 3,640
  1. The shipping alternative with cost advantage
    • From Karachi to Tashkent gives a freight rate index of 9,214, a transit time estimate of 38.3 days and a carbon dioxide emission index of 3,422. The shipment moves from Muhammad Bin Qasim port (Karachi) to Singapore port, from Singapore port to Tianjin Xingang port, from Tianjin Xingang port to Tianjin rail yard, from Tianjin rail yard to Chimkent rail yard finally reaching Tashkent, Uzbekistan.
  1. The shipping alternative with transit time advantage
    • From Karachi to Tashkent gives a freight rate index of 11,005, a transit time estimate of 34.3 days and a carbon dioxide emission index of 4,009. The shipment moves from Karachi Port to Nansha port, from Nansha port to Shenzhen rail yard, from Shenzhen rail yard to Chimkent rail yard finally reaching Tashkent, Uzbekistan.
  1. The environmentally friendly alternative
    • from Karachi to Tashkent gives a freight rate index of 9,869, a transit time estimate of 36.3 days and a carbon dioxide emission index of 3,165. The shipment moves from Muhammad Bin Qasim port (Karachi) to Nhava Sheva port, from Nhava Sheva port to Nansha port, from Nansha port to Shenzhen rail yard, from Shenzhen rail yard to Chimkent rail yard finally reaching Tashkent, Uzbekistan.
  1. The consignments in question can also be dispatched to Tashkent, Uzbekistan from Lahore, Pakistan via the shipping alternative with cost advantage
    • The aforementioned alternative gives a freight rate index of 11,334, a transit time estimate of 5.1 days and a carbon dioxide emission index of 5,973. The shipment moves from Lahore, Pakistan to Kabul International airport, from Kabul International airport to Dushanbe airport wherefrom it reaches Tashkent, Uzbekistan.

 

Trade Framework Between Uzbekistan and Pakistan

 

Bilateral relations

Bilateral relations have been established between Uzbekistan and Pakistan through agreements and memoranda of understanding [MoUs] which have been provided in the table below.

 

Regional Agreements

  1. Shanghai Cooperation Organization (SCO)

Pakistan and Uzbekistan share common interests under the framework provided by the SCO, allowing for diverse areas of cooperation between the two regions in terms of developing trade and economic linkages. With advantage of their geographical proximity, elimination of trade barriers, simplified customs procedures, and boosted investment would fall under the purview of the agreement, to facilitate sustainable socio- economic growth, intensified trade, economic and investment activity, and developing cooperation in high-tech sectors.


  1. Economic Cooperation Organization (ECO)

In 1985, the Economic Cooperation Organization (ECO) was established to promote economic, technical, and cultural cooperation among the member states, including Pakistan and Uzbekistan. With aim to promote regional economic integration, the agreement provides means to augment cooperation between Pakistan and Uzbekistan in the areas of connectivity, trade, energy, tourism, investment, industry, economic growth and productivity, social welfare and environment. Enhancing Cooperation for furtherance of education and scientific linkages, cultural and people to people contacts within the ECO region also remained amongst the priorities.

 

Recent Developments

  • Since June 2022, foreign vehicles engaged in international road transport are allowed to transit through the territory of Turkmenistan along the route Sarakhs (Iran) Sarakhs (Turkmenistan)>> – Farap (Turkmenistan) – Alat (Uzbekistan) » – Sarakhs (Turkmenistan) – Sarakhs (Iran) checkpoint with drivers.
  • Pakistan Customs processed the first-ever TIR consignment from Karachi at Torkham destined for Tashkent via Afghanistan, consisting of herbal medicines. Due to accession to the TIR convention, the Afghan government did not check Pakistani trucks carrying goods to Central Asian countries and ensured uninterrupted flows of trucks across the Pak-Afghan border.
  • The first-ever consignment of four trucks from Uzbekistan reached the Torkham border in Pakistan by land as result of the government’s efforts to strengthen regional coordination. An Uzbek truck carrying leather goods left Tashkent on May 9, passing through Afghanistan and reached Torkham on the Pakistani border on May 11, from where the goods were delivered to Faisalabad on May 13.
  • In April/May, courier service TCS had piloted Pakistan’s first land route for trade with Central Asia. A TCS truck set out on the Torkham-Kabul-Hairatan-Termez-Tashkent route, operating under the T.I.R Customs Transit System, and returned successfully.
  • Pakistan and Uzbekistan signed a protocol on the establishment of the Joint Security Commission which was followed by the inaugural session of the Commission formed under the protocol. General Victor Makhmudov and Dr Moeed Yusuf participated in the signing ceremony and led their respective delegations. The signed protocol covered wide-ranging security-related matters of mutual interest and established a coordination mechanism between Pakistan’s National Security Division and the Security Council of Uzbekistan under their respective heads.
  • The U.S.-Afghanistan-Uzbekistan-Pakistan Quad was announced, a diplomatic platform focused on enhancing regional connectivity and encouraging long-term peace and stability in Afghanistan, a prerequisite for regional connectivity. A productive U.S. role in the region would encourage increased connectivity via better infrastructure to promote trade.

 

Key Institutions

The financial institutions mutually affiliated with Uzbekistan and Pakistan are as follows:

  1. International Monetary Fund (IMF)
  2. The World Bank
  3. Central Asia Regional Economic Cooperation (CAREC) Program:

The Central Asia Regional Economic Cooperation (CAREC) Program is a partnership of 11 countries and development partners, including Pakistan and Uzbekistan, working together to promote development through cooperation, leading to accelerated economic growth and poverty reduction. The program may serve as a proactive facilitator of practical, results-based regional projects, and policy initiatives critical to sustainable economic growth and shared prosperity between the regions, by helping establish multimodal transportation networks, increasing energy trade and security, facilitating free movement of people and freight, and laying the groundwork for economic corridor development.

  1. Islamic Development Bank (IsDB)
  2. Asian Development Bank
  3. International fund for agricultural development (Ifad)