India, Uzbekistan step up economic engagement with focus on trade, investment

India and Uzbekistan on Sunday discussed ways to deepen economic and financial cooperation across priority areas as the two countries seek to translate their expanding strategic partnership into stronger trade, investment and institutional ties.

Union Finance Minister Nirmala Sitharaman met Uzbekistan’s Deputy Prime Minister Jamshid Khodjaev on the sidelines of the BRICS Summit in New Delhi, with the two sides reviewing bilateral economic relations and opportunities for greater engagement.

The meeting came less than a fortnight after Prime Minister Narendra Modi’s state visit to Uzbekistan, during which the two countries agreed to significantly expand cooperation in trade, investment, energy, critical minerals, digital technologies, healthcare, agriculture and connectivity.

Focus on economic partnership

During the meeting, Sitharaman and Khodjaev discussed opportunities for strengthening economic and financial engagement in areas of mutual interest.

The talks assume significance as India and Uzbekistan work towards expanding bilateral trade and unlocking greater investment flows between the two economies. The countries have identified considerable untapped potential in sectors ranging from pharmaceuticals and engineering goods to automobiles, energy and critical minerals.

Both sides have also been working to address non-tariff barriers and other impediments faced by businesses. During Modi’s visit to Uzbekistan in August, the two countries agreed to establish a Joint Working Group to deal with non-tariff issues and investment barriers.

India and Uzbekistan have set an ambitious target of increasing bilateral trade to $5 billion by 2030, with both governments looking to diversify the basket of goods exchanged and encourage greater business-to-business engagement.

The two countries are also exploring the next steps towards a Preferential Trade Agreement following the completion of a joint feasibility study.

Financial dialogue gains momentum

Economic and financial cooperation has acquired a more institutional character following an agreement signed during Modi’s visit to establish an Economic and Financial Dialogue between India’s Ministry of Finance and Uzbekistan’s Ministry of Economy and Finance.

The mechanism is expected to provide a structured platform for discussions on financial cooperation, investment and other economic issues.

The two governments have simultaneously sought closer cooperation between Invest India and Uzbekistan’s investment promotion authorities to identify projects, facilitate two-way investment flows and address concerns raised by investors.

Digitalisation is another area receiving attention. The two countries have agreed to explore cooperation in e-commerce, digital trade procedures and platforms that can help small and medium enterprises access each other’s markets.

Energy, minerals among priority areas

India and Uzbekistan have identified energy and critical minerals as important pillars of their expanding economic relationship.

The two sides are exploring collaboration in renewable energy, modernisation of energy infrastructure, geology, mining, mineral processing and the development of value-added supply chains. Indian companies are also being encouraged to explore opportunities in Uzbekistan’s mineral sector.

Pharmaceuticals, healthcare, agriculture, electrical equipment and engineering products are among other sectors where the two countries see potential for stronger commercial ties.

Connectivity remains an important component of the partnership, particularly as India seeks more reliable trade routes linking it with Central Asia.

The latest engagement also comes against the backdrop of Uzbekistan’s growing interaction with BRICS. As a BRICS partner country, Tashkent has sought closer economic engagement with the grouping while strengthening its bilateral partnership with New Delhi.

Sunday’s discussions reflected the broader effort by India and Uzbekistan to move from agreements towards implementation, with both sides seeking measurable progress in trade, investment and financial cooperation.