
In recent years, the foreign trade of Central Asian countries has shown consistent growth, with both imports and exports on the rise. However, several serious and long-standing challenges remain despite this promising trend and the region’s increasing integration into the global economy. The reliance on exporting raw materials and importing goods primarily from two major neighbors—Russia and China—coupled with weak regional cooperation and numerous internal issues, including corruption and inadequate protection of private property, hinder the five republics from fully tapping into their potential. Yuliy Yusupov, an economist and author of the research paper titled “Foreign Trade of Central Asian Countries: Trends, Barriers, Prospects,” financed by the CAPS Unlock analytical center, analyzed the region’s progress in the second quarter of the 21st century exclusively for POLITIK Central Asia and contends that, without a profound revision of conventional practices, the five former Soviet republics cannot overcome the barriers holding them back.
Growth trends
The total foreign trade turnover of Central Asian countries fluctuates significantly from year to year (Figure 1), primarily due to changes in the volume of exports of natural resources.

Kazakhstan and Turkmenistan are the only countries in the region with a positive trade balance (Figure 2). In contrast, the other states experience a negative balance, where their imports are funded not only by export revenues but also through remittances from labor migrants working abroad, in addition to foreign loans and investments pouring in.

The primary consumers of goods from Central Asia are European nations, China, and Russia, representing 65.4% of all regional deliveries between 2017 and 2023. Despite a noticeable trend of increasing volumes, the share of intraregional trade in total exports remains relatively modest at 8.5%. At the same time, Europe’s share of Central Asian exports has steadily declined, while China’s share has risen despite significant fluctuations. The share of Russia and Belarus has remained stable, ranging between 7% and 12%.

Kazakhstan stands out significantly in the region’s total goods exports, accounting for 72% from 2017 to 2022. This is followed by Uzbekistan at 15.6%, Turkmenistan at 8.4%, Kyrgyzstan at 2.3%, and Tajikistan at 1.7%. The disparity in these figures can be attributed to the varying levels of mineral reserves and production of minerals that are in demand on world markets and make up the bulk of local exports. Kazakhstan also leads in total goods imports, making up 53.2% from 2017 to 2022, while Uzbekistan follows with 28.5%, Kyrgyzstan at 7.7%, Turkmenistan at 5.5%, and Tajikistan at 5%.
During 2022–2023, the aggregate export of goods from Central Asian countries saw a remarkable rise of 61.6% compared to 2020–2021. During this period, the share of exports to China increased significantly, while the share of exports to Europe decreased, although absolute supply figures grew. Meanwhile, the shares of Russia and Belarus held steady at 10–12%, even as their absolute values saw an increase.
In this context, the official exports of goods from Central Asian nations to Russia and Belarus surged by 64.4% from 2020–2021 to 2022–2023. There is reason to believe that the real increase was significantly greater due to hidden “parallel” exports.
To gauge the scale of re-exports and these “parallel” deliveries to Russia, it’s useful to examine the extent and flow of “gray” imports from China. When comparing China’s official export statistics to the import reports of Central Asian countries, the discrepancies are striking. These gaps imply unrecorded shipments, some of which are likely meant for resale, primarily to Russia and within the surrounding region. Kyrgyzstan sees the largest influx of these “unrecorded” goods (Table 1), with a staggering difference of $25.7 billion between Chinese exports and Kyrgyz imports for 2022–2023, mainly involving light industrial products and vehicles. Kazakhstan follows with a discrepancy of $13.3 billion. Although the differences in Chinese export statistics for Tajikistan and Uzbekistan are less pronounced, they are still evident.

Meanwhile, in the region, total goods imports in 2022–2023 significantly increased compared to 2020–2021, rising by 47.5%. A significant portion of this growth came from China, which contributed $36 billion in 2023—a notable increase of 30.1%—compared to $15.8 billion and 19.9% in 2021. Conversely, the share of imported goods from the Russian Federation and Belarus decreased significantly, dropping from 35.2% in 2021 to 23.4% in 2023.
The largest surge in imports to Central Asian countries and exports from these nations to Russia and Belarus—often an indicator of re-export activity—was observed in machinery and equipment. This includes vehicles and their components, tractors and trucks, computers and peripherals, monitors, and projectors, as well as telecommunication devices and electrical equipment for starting engines, electrical transformers, and household items like printing and dishwashing machines and pumps. Also, there was a considerable increase in a diverse range of textile products, alongside various other non-food items such as tires, fastening hardware, and paving slabs.
Challenges and issues
Although Central Asia’s overall trade turnover has grown significantly, the region still faces several major challenges in foreign trade.
One prominent issue is the low level of geographic diversification in trade activities and a heavy reliance on trade flows from Russia and China. In 2023, these two countries, along with Belarus, made up 34.5% of Central Asia’s exports and 53.5% of its imports. This reliance places the region’s economies in a vulnerable position, increasing their political and economic dependency on Russia and China— a situation that poses serious risks amid the current geopolitical climate. Additionally, the Central Asian countries depend heavily on transport corridors that pass through Russian and Chinese territories, further limiting their options for diversifying foreign trade.
The challenges are further compounded by Uzbekistan, Kyrgyzstan, and Tajikistan’s heavy reliance on remittances from labor migrants working in Russia. Moreover, both Russia and China play a significant role in investments across the region.
The region’s second challenge is its reliance on raw materials and the limited diversification of its exports. From 2017 to 2023, about 80% of exports comprised minerals and primary products extracted from them, specifically hydrocarbons, ferrous, non-ferrous, precious metals, and uranium. Additionally, the region exports significant amounts of textile raw materials (including yarn, fabrics, and textiles), cement, plastic, rubber components, fertilizers, and food products with low added value, such as wheat, flour, fresh fruits, and vegetables.

In contrast, the contribution of finished products with high-added value remains minimal. These include textile and clothing goods, a wide range of products derived from ore and non-metallic minerals, mechanical and electrical machines and equipment, vehicles, processed meats, dairy, fruit, and vegetables, and confectionery items.
Kazakhstan, Turkmenistan, and Tajikistan are most dependent on minerals, with 80-90% of their total exports made up of these goods. This figure is slightly lower in Uzbekistan and Kyrgyzstan, at around 55-60%.
Between 2017 and 2022, more than 60% of Kazakhstan’s exports were hydrocarbons, particularly oil, followed by 21.5% from ores, metals, and associated products. In addition, there was a notable share of grain, flour, and finished flour products.
Uzbekistan’s export profile showed that gold made up over 34% of its total exports, with textile industry raw materials (cotton fiber, yarn, fabrics, and linen) now in second place, surpassing natural gas supplies. Additionally, fruits and vegetables accounted for 7.3%, finished textiles and clothing represented 4.7%, and copper and copper products at 6.2%.
Turkmenistan’s export landscape is primarily dominated by fossil fuels, which account for 83.7% of its exports. Other significant contributors include cotton textile raw materials (4.5%), fertilizers (3.6%), and plastic granules (1.5%).
In Kyrgyzstan, gold, including precious metal ores and concentrates, represented 46.4% of total supplies in 2017-2022. The textile industry also plays a notable role, making up 9% of exports (with finished products taking the lead) and various food products, including fruits, vegetables, meat, dairy, and flour.
Tajikistan’s export variety is the least impressive, with gold at 25.5%, aluminum and aluminum products at 12.1%, and other ore minerals (lead, zinc, copper) and their primary products making up 31.6%. Essential supply items also include raw materials for light industry (14.6%), electricity (4.9%), and cement (3.8%).
The overall diversification of exports for countries within the region is significantly influenced by their geographical orientation. Between 2017 and 2022, an impressive 96% of Central Asian exports to Europe were comprised of raw materials, which included minerals and primary light industry products. Similarly, China predominantly imports raw materials, with 95% of its total commodity imports categorized as such, including combustible and ore minerals, as well as uranium. The export patterns to East Asia and Türkiye reveal comparable trends, with raw materials constituting 96% and 88% of the total exports, respectively.
In contrast, the export structure to Russia and Belarus is more diversified, where resource goods, including various metals, hydrocarbons, uranium, and light industry raw materials, represent 61% of supplies. Notable export items also include fruits, vegetables, and other food products, textiles, plastics, and plastic products, as well as chemical goods, machinery, and equipment.
The export structure among the Central Asian countries themselves demonstrates greater diversification, with raw materials only making up about 40% of intra-regional trade. This primarily involves base metals and their products, hydrocarbons, and associated primary products. In addition, the trade includes grains, legumes, fruits, and vegetables, along with non-food products like machinery, chemical and light industry goods, and electricity.
The third issue is the relatively low level of intraregional trade among the five republics, which prevents them from fully capitalizing on the benefits of the division of labor and industrial cooperation. However, there has been a small but steady increase in both the volume and share of intraregional trade turnover—from $1.6 billion and 3.1% of total exports in 2006 to $9.6 billion and 8.1% in 2023. This trend became more pronounced after 2017, likely due to the liberalization of the foreign trade regime in Uzbekistan.
In terms of absolute numbers, Kazakhstan leads in exports to regional markets, with $22.1 billion from 2017 to 2022, accounting for 51.5% of all intraregional exports. Following Kazakhstan, Uzbekistan exported $11.8 billion, Kyrgyzstan $3.2 billion, Turkmenistan $3.1 billion, and Tajikistan $2.7 billion. Notably, Uzbekistan is Central Asia’s main consumer of goods, totaling $16.4 billion from 2017 to 2022. Kazakhstan ranks second with $9.2 billion, followed by Tajikistan at $6.1 billion, Kyrgyzstan at $5.2 billion, and Turkmenistan at $1.4 billion.
Examining the structure of intraregional exports from 2017 to 2022, excluding minerals, Kazakhstan emerges as the primary supplier of non-resource goods to regional markets, accounting for 53.3%. Uzbekistan follows with 36.4%, while Kyrgyzstan contributes 7.1%. The shares of Turkmenistan and Tajikistan are minimal. Both Kazakhstan and Uzbekistan export a significant amount of food products; Kazakhstan specializes in grain, flour, and related products, whereas Uzbekistan focuses on fruits and vegetables. Additionally, both countries dominate in the export of machinery, equipment, and chemical products. Uzbekistan is particularly known for its light industry goods.
Kyrgyz producers are active in the regional markets for meat, dairy, textile products, and items made from non-metallic materials, plastic, rubber, and other food products. Turkmenistan primarily exports fruit and vegetable products as well as plastic and rubber goods, while Tajikistan’s main exports include fruit, vegetable products, and textile raw materials. Furthermore, Turkmenistan and Tajikistan play a significant role in the export of electricity.

Barrier-laden environment
Despite the seemingly positive dynamics, the study has identified several significant obstacles to expanding and diversifying foreign trade in Central Asian countries.
Firstly, there are various tariff and non-tariff trade barriers in place. All the states in the region, except for Turkmenistan, are part of the free trade zone within the Commonwealth of Independent States (FTA CIS). This arrangement means customs duties and excise import excise taxes do not apply to mutual trade among these countries. Additionally, Kazakhstan and Kyrgyzstan are members of the Customs Union of the Eurasian Economic Union (CU EAEU). While these agreements greatly facilitate trade among the republics, substantial customs duties on certain products from third countries persist, limiting diversification options and increasing reliance on imports from Russia and Belarus, which are also part of the FTA CIS and CU EAEU.
Moreover, local producers benefit from various incentives, including tax breaks, customs exemptions, subsidies for raw materials, and priority in government contracts. However, international trade procedures remain costly and labor-intensive, particularly at border crossings, complicating trade flows.
Outdated mandatory state standards, such as stringent environmental, sanitary, and veterinary regulations and strict product packaging and labeling requirements, can also act as obstacles. Such barriers may be part of a deliberate protectionist policy or the result of inefficiencies in government operations. In the latter case, they may stem from inadequate information dissemination, weak digitalization and automation of processes, and poor coordination between agencies both within the country and at the intergovernmental level. Additionally, barriers are often artificially created to allow officials to extract corrupt rents.
Secondly, the costs and risks associated with poor-quality road and rail infrastructure pose another challenge. The high costs and limited quality of transport and logistics services, often arising from insufficient competition in the sector, as well as the underdeveloped trade and financial infrastructure, stifle the growth of trade flows, including intra-regional exchanges, and diminish Central Asia’s potential as a transit hub.
Furthermore, there is a heavy reliance on transport corridors that pass through Russia. The ongoing conflict in Ukraine and the resulting international sanctions against Russia have escalated logistics costs along the Northern Corridor, which connects China to the EU, causing significant delivery delays and soaring freight tariffs.
This situation has prompted countries in East Asia and Europe to seek alternative transport routes, particularly the Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor, which traverses Central Asia and the Caucasus. A major initiative is the construction of the Trans-Asian Railway (TAR) linking Europe and Asia. Central Asian states are keen to explore alternatives to the Northern Corridor, as these routes may provide access to maritime shipping. For instance, the Southern Corridor through Afghanistan and Pakistan could connect to Indian Ocean ports, although political instability in Afghanistan remains a major hurdle. A route through Iran could be pursued, yet the country faces international sanctions.
The region’s third major obstacle is the low competitiveness of local goods and services that offer high-added value. Central Asian countries tend to sell few of these products while importing large quantities, with foreign exchange earnings largely stemming from exports of raw materials and remittances from labor migrants—particularly in Tajikistan, Kyrgyzstan, and Uzbekistan. This heavy reliance on the export of natural resources and labor is a defining characteristic and significant challenge for these economies. Consequently, the Central Asian republics are highly vulnerable to external shocks. Fluctuations in global commodity markets and geopolitical issues pose notable risks to their long-term economic growth.
Three key factors account for the relatively low competitiveness of regional goods with high added value. First, the overvaluation of national currencies’ real exchange rates affects all Central Asian nations. This situation stems primarily from significant raw material exports—a condition often termed “Dutch Disease”—as well as income generated from labor migration. As a result, the costs of local products increase, making them less competitive against foreign alternatives.
Second, businesses face relatively high operational costs and risks stemming from inadequate protection of property rights, along with significant tax, debt, and administrative challenges within national economies. These hurdles diminish the attractiveness of high-value-added sectors for foreign direct investment (FDI). Furthermore, the limited inflow of FDI, which is vital for establishing competitive industries, is also linked to the small market sizes of these countries. Investors tend to view them individually rather than as part of a unified economic space. Additionally, the prevalence of informal economies, financial instability, underdeveloped financial markets, and insufficient integration—except for Kazakhstan—into the global financial framework complicate matters, along with a lack of skilled workforce.
Lastly, increasing pressure on water resources presents a serious barrier to the region’s investment appeal. This global challenge disproportionately affects the Central Asian republics, which are heavily reliant on agriculture and face significant climate risks, such as dwindling water reservoirs and melting glaciers.
On a positive note, trade in high-tech goods represents a promising opportunity for both intra-regional trade and diversification of exports beyond Central Asia. To capitalize on this potential, the five republics must urgently attract FDI in high-value-added industries and encourage local companies to engage in international value chains.
To boost the competitiveness of Central Asian economies, enhancing the investment climate and fostering regional integration are crucial. These aspects are closely interconnected; for instance, the limited size of domestic markets often deters foreign investors seeking broader sales opportunities. In light of these challenges, the study concludes that the region must undertake several urgent measures to improve the current situation and fully realize its trade and economic potential.
First, it is essential to lower both tariff and non-tariff barriers for trade within Central Asia and with external partners. Second, investments in transport, trade, logistics, and financial infrastructure must be prioritized. Third, barriers to regional economic integration should be removed. Fourth, efforts must focus on improving the business climate by reducing tax, debt, and administrative burdens while enhancing the quality of economic policies across the Central Asian republics. Finally, fostering an export-oriented industrial policy will be critical for progress.

Yuliy Yusupov
Independent economist
Similar news


City fever. Why Central Asia is racing to build new cities from scratch
In recent years, several Central Asian countries have unveiled ambitious plans to develop eco-friendly cities...
- 4 days ago


A stone desert or a gateway to the future. What the Wakhan Corridor can offer and why It remains closed
For over three years since the Taliban took over Afghanistan, Beijing has emerged as one...
- 2 months ago


Through us—even a torrent. How Central Asia became a nearly sanctions-free zone.
Geopolitical tensions between major and medium-sized powers pose growing risks for various regions around the...
- 2 months ago


From local bazaar to global market. Why Uzbekistan seeks WTO membership
A market with new rules: what WTO membership could bring to Uzbekistan? Uzbekistan is rapidly...
- 3 months ago


The Triple Non-Alliance. How Uzbekistan and Kazakhstan make up for the gas deficit with the help of Russia
Since the end of the 19th century, Central Asia has been known for its natural...
- 3 months ago