Uzbekistan woos textile companies with tax sops

The domestic textile industry has something to cheer about as Uzbekistan, the fifth largest producer of cotton, has sought investment from Indian textile players.

Ruzikulov Rahamatullah Ruzikulovich, minister for textiles of Uzbekistan said that his government is committed to increasing FDI in the textile industry.

Among the incentives announced are, exemption of VAT for exports, exemption of custom duty on import of equipment and equipment parts, a price discount of 15 per cent on cotton fibre for foreign investors and lower income tax rate to exporters.

"Recognising the strategic importance that cotton textile industry holds for our economy, the government of Uzbekistan has decided to promote our country as a hub for textile exports to Europe and United States," said Ruzikulov.

Uzbekistan produces around 12 lakh tonne of cotton, out of which,80 per cent is exported.

He pointed out that in a post-quota regime, Uzbekistan with its proximity to the key markets of Europe was an ideal destination for the Indian players.

"The recent acquisition of Tashkent-To'yetpa Tekstil Limited in Uzbekistan by Spentex Industries Limited, the textiles arm of CLC Group of India, has sparked off a lot of interest in the Indian textile industry about the opportunities offered by investing in our country," he said adding that during his visit to India, he will also be meeting several leaders of the Indian textile industry.

S Mukherji, Managing Director and CEO, ICICI Securities, the sole strategic advisor to Spentex for the $81 million Tashkent-To'yetpa Tekstil deal, said, "Following this deal several of our clients have expressed interest in investing in Uzbekistan and over a period of time, I am sure the Indian presence in that country, will only increase."