Russian industry is looking for components

As “Kommersant” reports, the Ministry of Industry and Trade of the Russian Federation is preparing new measures within the framework of the “export” national project, counting on deeper industrial cooperation in the production of components for mechanical engineering with the countries of Central Asia. Deputy Prime Minister and Head of the Russian Ministry Denis Manturov announced this at the “Innoprom. Central Asia” exhibition in Tashkent. We are talking, in particular, about supporting the creation of Russian industrial infrastructure abroad, the development of international transport corridors and the allocation of funds for the creation of industrial parks, including through preferential lending.

Russia is interested in organizing joint production of components for mechanical engineering with the countries of Central Asia, Denis Manturov said at “Innoprom” in Tashkent. He noted that last year, imports to the Russian Federation from these countries increased by 12%, including trade turnover with Uzbekistan increased to $10 billion (this is twice as much as in pre-Covid 2019).

Now the Russian Ministry of Industry and Trade is counting on deepening industrial cooperation and developing higher processing stages in basic industries, as well as organizing the production of not only components, but also equipment and systems for digitalization and automation of production. Note that such supplies are increasingly subject to sanctions restrictions – this creates difficulties for the Russian Federation in carrying out foreign trade transactions.

For its part, Uzbekistan expects an increase in industrial activity in the country and growth in exports.

Deputy Head of the Government of Uzbekistan Jamshid Khojaev said that in addition to the development of industrial assembly, investors are expected to invest in the work of large agricultural companies, warehouse terminals and enterprises for processing agricultural products, as well as the introduction of new agricultural technologies, development of IT and the textile industry. There are also plans to localize the production of household appliances together with Chinese and Korean manufacturers.

To attract investors, the country has created special economic zones (SEZs), the participants of which are promised generous tax benefits (including income tax, this benefit is linked to the volume of investment in the project).

Most SEZs are industry-linked; in the “Navoi” SEZ, residence has an extraterritorial status – most of its participants are located outside the boundaries of this industrial park, the head of the SEZ, Khabib Abdullayev, told “Kommersant”. Investors are attracted by the possibility of importing components and equipment without paying duties and VAT during re-export – as well as by low rental rates for finished space ($1.5–3 per square meter) in the zone itself. With Russian participation, two technology parks have been created in the country – in the cities of Chirchik and Jizzakh, and two more are being built – in Bukhara and Navoi regions.

In total, according to the Russian side, 24 thousand companies with Russian participation operate in Central Asia, the accumulated volume of investments is estimated at $38 billion.

As a part of the update of the national project “International Cooperation and Export”, new support measures will appear, Denis Manturov said. We are talking about supporting the creation of Russian industrial infrastructure abroad and the development of international transport corridors. Director of the Department of International Cooperation and Licensing in the Sphere of Foreign Trade of the Ministry of Industry and Trade Roman Chekushov explained that within the framework of the national project funds may be provided for the creation of industrial parks, including through preferential lending.

It should be noted that in February of this year, the State Duma, in the first reading, adopted amendments to the law on industrial policy, which will make it possible to extend state support to contracts for complex investment and construction projects in “friendly” countries, in order to support the presence of Russian business in their markets through the creation production and logistics infrastructure. The Ministry of Industry and Trade has a list of potential projects in Tajikistan, Uzbekistan, India, Saudi Arabia, Egypt and Turkey, Deputy Minister of Industry Viktor Evtukhov explained then.