Over the last decade, a number of grave structural changes took place in the world\'s textile sector. Today, countries, which succeed in minimizing the production factors that directly influence the output\'s prime cost, become leaders in this industry. As for the European countries, the US, South Korea and Turkey, they cannot compete with developing countries in the production of textiles. As a result, countries such as China, India, Pakistan, Bangladesh, Brazil, and Uzbekistan emerge as the most promising regions in terms of developing highly competitive textile production.

These days, the Republic of Uzbekistan has confidently joined the global textile community. The following advantages are behind its success in the textile sector; availability of government support, the favorable investment climate, skilled labor force, high quality textile raw materials (cotton and yarn), low cost of production resources, industrial infrastructure and auspicious conditions for access to the major markets in Europe and the CIS.

The afore-mentioned factors contribute to the dynamic development of the textile industry and increase the volume of attracted foreign investments. In recent years, more than 100 enterprises have been set up in Uzbekistan with participation of foreign investors from Germany, Switzerland, Italy, South Korea, Japan, Turkey, the US, India and other countries. Over US $1,3 billion worth of foreign investments were enticed to the indigenous textile industry. For the time being, the country\'s capacity to turn out cotton yarn stands at 360.0 thou tons, cotton fabric - 210.0 million square meters, stockinet linen - 90.0 thou tons, garments and knitted wear - 200,0 million units and hosiery - 60 million pairs.

Speaking of the efficient system of incentives and legal guarantees for foreign investors that is in place in Uzbekistan, it seems necessary to specify the following privileges:

• Tax incentives: an enterprise set up with foreign capital participation, specializing in the production of finished goods, are exempt from all taxes and duties, except for value added tax. In addition, textile enterprises are offered the opportunity to reduce, within three years, the deductible base for income tax to the amount of funds allocated to purposes such as technical and technological re-equipment, repayment of loans and reimbursement of the cost of leasing.

• Customs incentives: companies are exempt from customs duties (except for customs clearance duties) on imported equipment and spare parts, raw stuff and materials used in the production process, which are not produced domestically, and delays in the payment of customs duties for up to 60 days;

• Price incentives: companies buy cotton fiber at a 15 per cent discount of the world prices with a deferred payment for 90 days.

Enterprises with foreign investments receive an additional discount of 5 per cent on the purchased cotton, on condition that the total volume of cotton fiber they have bought will be processed and finished textiles made thereof, including garments, knitted wear and hosiery.

• Export incentives: textile companies, exporting over 80 per cent of their output, are exempt from property tax.

Today, the image of Uzbek textiles, including cotton yarn, finished garments and knitted goods, is tending to improve in the international marketplace.

In 2009-2010, thanks to government support and realization of targeted measures for the development of the textile industry, 45 modern textile and garment-and-knitted wear production facilities were put into operation, with capital investments to the tune of more than US $250 million being implemented during the indicated period. As a consequence, textile production and export volumes grew 5-fold and 1.6-fold, correspondingly (from US $385.2 million in 2009 to US $620 million in 2010).

In the year 2011, export of textile produce from Uzbekistan exceeded US $660 million. According to some estimates, the figure will exceed US $2.0 billion by 2015. The geography of export deliveries of Uzbek textiles tends to expand with each passing year. Suffice it to say that in 2010 alone, several new markets such as China, Iran, Greece, Israel, Britain and the US were added to the list of the Republic\'s traditional markets (including Turkey, Germany and the CIS).

In order to develop the range of their marketing services and to ensure the geographic expansion of their exports, the Uzbek textile enterprises have opened upwards of 40 trade centers across the CIS member states and the European Union.

Special attention is paid by the government of the Republic of Uzbekistan to the further development of the light industry. To this end, a number of priority tasks have been identified, aimed at re-equipping existing enterprises and creating new high-tech production facilities, as well as at increasing the volume of domestically processed cotton fiber.

The Uzbek government has developed the Program for the Development of the Textile and Light Industry in the Republic of Uzbekistan for 2010-2015. The document provides for the implementation of more than 100 projects totaling over US $1.6 billion. Their implementation will allow the country to bring the level of domestic cotton fiber processing to 80 per cent of the total production volume, and to treble the textile industry\'s export potential.

It should be noted that particular attention is devoted to the realization of projects carried out by leading international textile companies. For now, companies such as Korea\'s Daewoo International, Singapore\'s Indorama and Bedeyl Group, Switzerland\'s Riter, Turkey\'s Bo Group, TARMAC Group and Santex and many others are successfully operating in the Uzbek textile sector.

Taking into account international experience and recommendations from international agencies, as well as the policy measures taken by the government, the following priorities have been identified for the development of the Republic\'s textile industry:

To increase the production volume of resource-intensive output (terry goods, home textiles, etc.) and labor-intensive products (knitted-wear and garments), as well as to develop innovative directions in the production of mixed and technical fabrics;

• to create \"complete\" production cycles for a wide range of finished goods;

• to support enterprises, trying to penetrate foreign markets, to implement their output promotion programs, and to solve issues surrounding logistics and access to foreign markets;

• to carry out targeted work on the development of the \"Uzbek Textile\" brand in the international marketplace.

The prospects for the Uzbek textile industry to date indicate that demand is steadily growing in the world market for products made of natural fibers, which provides almost unlimited export opportunities for the country\'s textile sector. By the way, exporting finished produce will give Uzbekistan the greatest economic benefit. Today, domestically manufactured fabrics, textile goods and clothes, carrying the \"Made in Uzbekistan\" label, are generally sought after by customers from the CIS member states and other countries. As the quality of domestics and marketing instruments improves, the Uzbek textile sector becomes more and more competitive, winning over its niche in the global market. (Source: “BusinessPartner.uz” newspaper)