Methods of state regulation

In order to reduce the cost of production and ensure the optimization of imports, two effective methods of state regulation have been developed in world practice:

- application of customs and tariff policy,

- development of localization of production and expansion of industrial cooperation.

The first method involves the creation of certain barriers for foreign goods when crossing the border. The second method introduces regulations prescribing the mandatory placement of production on the territory of the state (usually expressed as a percentage of the cost of the product).

Increasing the level of localization plays an important role in ensuring the sustainable and consistent development of the economy of our country, reducing dependence on external factors and accelerating the introduction of new technologies in production processes.

To ensure dynamic and sustainable development of the economy, reducing its dependence on external factors, the country is implementing the "Localization Program".

In order to develop and support localization programs in the republic, a number of the following resolutions and regulations have been adopted:

- Resolution No. PP-2698 of May 1, 2019 "On measures to continue the implementation of promising projects for the localization of finished products, components and materials for 2017-2019"..

- Resolution No. PP-4302 of August 24, 2019 "On measures to further develop industrial cooperation and expand the production of highly liquid goods"..

- Resolution of the Cabinet of Ministers of the Republic of Uzbekistan of December 17, 2019 "On increasing the responsibility of state and economic governing bodies, as well as local executive authorities for the implementation of a new system of localization of production and cooperative ties".. 

- Resolution of the year No. 136 of March 10, 2020 "On the program for localization of consumer goods in the domestic and foreign markets for 2020-2021".

In accordance with the Regulation on the procedure for the formation, implementation of the program for localization of production of finished products, components and materials based on industrial cooperation and maintaining a reporting system in accordance with PKM No. 1009 of December 17, 2019, projects are included in the localization program if their indicators meet the following criteria:

• constant import of localized products in large quantities to the territory of the republic;
• the presence of the possibility of creating a value chain based on the production capacity of localized products and the raw material base;
• focus on the production of quickly wearing components, spare parts and materials for process equipment available in the industry and at territorial enterprises;
• the level of localization of manufactured products must be at least 36%;
• the presence of demand for localized products at the required level in the domestic and foreign markets;
• availability of production infrastructure, especially the use of empty buildings and infrastructure available in small industrial zones;
• established cooperation links between large and small enterprises.

The regulation defines localization as a process related to the production (performance of work, provision of services) of import-substituting finished products, components, spare parts, raw materials and materials. The program of localization measures is approved by the Cabinet of Ministers.