Uzbekistan is increasing investment in its electrical equipment industry and developing the capacity to manufacture more technologically sophisticated products. However, the rise in capital investment has not yet been matched by comparable growth in industrial output. According to Alona Lebedieva, owner of Aurum Group and co-owner of the Tashkent Pump Plant, the key priorities for the industry’s further development should be improving productivity, localizing the production of critical components, and reducing manufacturing costs.
On November 9, 2026, President of Uzbekistan Shavkat Mirziyoyev met with representatives of the electrical equipment industry, entrepreneurs, and investors. Over the past decade, approximately $2 billion has been invested in the sector, 413 production facilities have been launched, and the production of more than 100 types of products has been established. Industry output reached 50 trillion soums in 2026, compared with 1.7 trillion soums in 2016, while exports increased to $1.6 billion.
The next stage will focus on manufacturing more sophisticated products, including electric motors, inverters, industrial electronics, and automation systems. Over the next three years, 164 projects worth $11.6 billion are planned, including 29 projects for the production of transformers and pumps, with a combined value of $1.4 billion.
However, Alona Lebedieva believes that the scale of investment should be assessed primarily in terms of its economic returns.
“Uzbekistan has already learned how to attract capital and launch new production facilities. The key question now is how efficiently companies use these investments. A factory may install a modern production line and increase output, but if the equipment remains underutilized, critical components are still imported, and production costs do not decline, its competitiveness will not improve significantly. We need to shift our focus from increasing production volumes to improving productivity,” Lebedieva says.
Investment Is Rising, but Productivity Remains an Open Question
According to the National Statistics Committee of Uzbekistan, fixed capital investment reached 584.2 trillion soums in January–September 2026, an increase of 20.1%. Industrial output grew by 8.1% over the same period, reaching 1,085.7 trillion soums.
Manufacturing accounted for 160.8 trillion soums, or 27.5% of total capital investment. At the same time, it generates 86.9% of the country’s industrial output.
The gap between investment and production growth rates does not automatically indicate declining efficiency, as major projects take time to generate returns. Nevertheless, it highlights the need to assess not only investment volumes but also labor productivity, capacity utilization, production costs, and export competitiveness.
The structure of foreign trade is equally revealing. According to figures cited by Alona Lebedieva, Uzbekistan exported approximately $429 million worth of machinery, equipment, and related parts in 2024, while imports of the same category amounted to around $6.39 billion. Imports were therefore almost 15 times higher than exports.
Some of these purchases are associated with the modernization of industrial enterprises. However, such a substantial gap underscores the continued importance of developing domestic manufacturing capabilities and producing competitive machinery and equipment.
Localizing Components Matters More Than Localizing Assembly
The new investment programs are particularly significant for the pump manufacturing industry. Uzbekistan is modernizing its water management infrastructure, developing its energy sector, and implementing major industrial projects, creating domestic demand for pumps, electric motors, and automation systems.
However, establishing a fully developed manufacturing base requires more than setting up assembly lines. Critical components – including bearings, seals, high-precision hydraulic assemblies, and electronic control systems – are still sourced from abroad in many cases.
As Alona Lebedieva emphasizes, the depth of localization is what determines a company’s technological independence.
“Take pumping equipment, the industry in which I work. Localizing the production of pump housings and assembly operations makes it possible to increase output, but it does not always significantly reduce production costs or improve technological independence. A very different result comes from developing the capacity to manufacture critical components. When a company produces high-quality hydraulic assemblies, electric motors, and control systems itself, or sources them from domestic partners, it can manage costs, quality, and delivery times more effectively,” says the co-owner of the Tashkent Pump Plant.
In her view, the development of the electrical equipment industry creates opportunities for cooperation among manufacturers of pumping equipment, electric motors, and industrial automation systems. However, such cooperation should be based on technical specifications and economic efficiency rather than solely on the objective of replacing imports.
International Standards and Access to Financing
A presidential resolution dated September 12, 2026, has become an important policy instrument for the sector’s development. It sets targets to increase exports of electrical equipment and related products to $5 billion by 2030, attract $3 billion in investment, and expand the production of higher-value-added goods.
The resolution also provides for concessional financing for businesses, support for raw material purchases, and partial compensation of interest expenses on investment loans.
However, access to capital must be accompanied by improvements in manufacturing quality. To participate in major energy, oil and gas, and infrastructure projects, equipment must comply with applicable international API and ISO standards, as well as customers’ technical requirements.
This requires the development of testing laboratories, certification procedures, quality control systems, and after-sales service capabilities. Without meeting these requirements, access to international markets will remain limited, regardless of investment volumes.
Access to long-term financing is equally important. High capital costs may encourage companies to prioritize projects with shorter payback periods rather than pursue more complex technological modernization.
From Production Growth to International Competitiveness
The development of Uzbekistan’s electrical equipment industry creates opportunities to expand industrial cooperation with Kazakhstan, Kyrgyzstan, Tajikistan, and other countries in the region. However, sustainable export growth requires competitive production costs, verified product quality, and well-developed service infrastructure.
According to Alona Lebedieva, government support should create conditions in which companies compete primarily on product quality and production efficiency.
“Foreign technologies and international standards raise the bar for our companies. But when access to financing and major contracts depends primarily on administrative factors, the incentives to reduce costs become weaker. We need a competitive environment in which a manufacturer’s success is determined by product quality, productivity, and the ability to compete in international markets,” Lebedieva emphasizes.
The coming years will show whether Uzbekistan can turn large-scale investment into sustained productivity growth. The main measure of success will not be the number of new enterprises established, but their ability to reduce production costs, develop the capacity to manufacture sophisticated components, and produce equipment that can compete beyond the domestic market.