The Uzbek government has rolled out a fresh package of financial incentives designed to reinforce the country’s cotton and textile sector, improve the financial health of businesses, and encourage greater value addition through advanced cotton fiber processing.
The measures have been introduced under Presidential Decree PP-246, titled “On measures to improve financial stability in the cotton and textile industry and additional support for deep fiber processing,” according to the Ministry of Justice.
As part of the Uzbekistan cotton textile support initiative, cotton-textile clusters and businesses established by these clusters will receive a subsidy of UZS 3 million (approximately US$250) per hectare for cultivating raw cotton on officially allocated agricultural land during 2025.
Eligibility for this financial assistance will depend on satellite-based verification. The Agency for Space Research and Technology, Uzbekcosmos, must confirm that cotton is being cultivated on land assigned by the Ministry of Agriculture before subsidies are approved.
The decree also extends support to manufacturers producing dyed fabrics, dyed yarns and blended yarns. Enterprises that complete qualifying projects before June 1, 2026, will be able to access subsidies using the remaining funds originally earmarked for dyeing equipment under the presidential decree issued on January 21, 2022.
In another significant relief measure, cotton-textile clusters and textile companies that achieve Category A or above in the entrepreneur sustainability rating will qualify for accelerated VAT refunds. Until July 1, 2027, eligible businesses will receive refunds for negative value-added tax balances within 20 days without undergoing tax audits.
The Uzbekistan cotton textile support package also introduces financial assistance for cotton growers beginning with the 2026 harvest. Producers who obtain preferential loans will be entitled to partial reimbursement of interest costs. Those making repayments on schedule can receive compensation of up to 2.5%, while borrowers settling their loans before December 31 will qualify for reimbursements of up to 5%.
Textile clusters and cotton-processing enterprises will additionally benefit from interest compensation on commercial loans taken to procure raw cotton. The reimbursement will cover the portion of annual interest rates above 8%, up to a maximum threshold of 16%.
From September 1, the Agricultural Payments Agency will start reimbursing farmers for a portion of the expenses associated with electronic invoices issued during raw cotton transactions.
The agency will also provide financial reimbursement to cotton-textile clusters and textile enterprises for part of the cost incurred when purchasing raw cotton using their own financial resources, further easing working capital requirements across the industry.
