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07 May 2020

Textile companies will be supported

The President of Uzbekistan Shavkat Mirziyoyev signed a decree «On urgent measures to support the textile and clothing-knitting industry»

In pursuance of the document, a whole range of measures will be implemented to mitigate the negative impact of the global economic crisis caused by the pandemic on the development of the industry.

In particular, a new pricing and cotton pricing procedure is being introduced. The starting price of domestic-made fiber of basic quality is determined by the seller based on the value of the futures quotes on the New York Mercantile Exchange for the next month of delivery. The term for final settlements for fiber sold by domestic textile enterprises at exchange trading for the national currency until 1 April 2020, is extended from 90 to 150 days.

Until 1 January 2022, certain types of imported raw materials were exempted from customs duties. From 1 May to 31 December 2020, a simplified procedure for VAT refunds applies.

A simplified procedure applies to enterprises in the textile and apparel and knitwear industry, provided that they export goods within the past 12 months, and the overdue export receivables do not exceed $ 10 thousand.

At the same time, receivables are recognized as overdue if foreign currency earnings are not received in the exporter’s accounts with a local bank after 180 calendar days from the date of release of goods under the customs export regime.

Along with this, additional financing will be directed to investment projects implemented in 2020–2025, as well as providing textile and sewing-knitting enterprises with working capital.

For each kilogram of exported yarn and knitted fabric through the customs border of the country, from 1 January 2021, a fee of US$0.01 is set, from 1 January 2022 at US$0.05, from 1 January 2023 – US$0.1 and from 1 January  2025 – US$0.2.

In addition, in 2020, the state will purchase from domestic enterprises additional volumes of sets of clothes, winter and uniforms, shoes, bedding, mattresses, pillows, bedspreads and other textile accessories, and clothing and knitwear products.

Market participants will be helped to conclude new export contracts in exchange for the unpromising ones, hold negotiations with representatives of world brands, and obtain international certificates.

Large enterprises in the industry will conduct stress tests to determine their performance, financial efficiency and competitiveness. Large regional textile-sewing clusters will be developed.

By 1 September, the government will approve investment projects for 2021-2025 – each new sewing and knitwear production should produce products of well-known international brands and create at least 1,000 jobs.

The list of imported raw materials and materials exempted from customs duties