A new stage of reforming the state procurement system is being prepared in Uzbekistan, with the goal of strengthening the involvement of local producers, reducing dependence on imports, and making the process more transparent for the business community.
Current State and Procurement Challenges
At the first meeting of the Council of the Association of Public Procurement Participants, authorities presented an analysis of the current situation and outlined plans for further modernization of the system. Jakhongir Yunusov, Deputy Director of the Agency for Industrial Cooperation and Public Procurement, reported that the total volume of state procurement reached 70 trillion soums last year. However, despite this, a large part of these funds continues to be directed towards imported products, while the contribution of domestic producers remains insufficient.
Yunusov noted that there are companies in the country with serious production capacities and high turnover that could participate in public procurement but are not properly represented in the system. The central problem identified at the meeting is not the lack of local producers, but their low participation in procurement procedures.
Barriers for Domestic Producers
According to Yunusov, many enterprises produce competitive products with large output volumes, but they lack understanding of the public procurement mechanisms: they do not know where to apply, what documents to prepare, or how to enter the system.
As a result, local products often enter public procurement not directly, but through intermediaries. These third parties purchase goods from local producers, add a significant markup, and participate in the tender in their own name. According to the agency's estimates, this can lead to the state paying for local goods twice their actual market value.
The agency believes that it is critically important to raise producers' awareness. This task includes not only explaining legislative norms but also providing practical assistance to companies in registering on platforms, preparing necessary documentation, meeting customer requirements, and participating correctly in tenders.
Tools of State Support
To eliminate these difficulties, the Agency for Industrial Cooperation and Public Procurement is implementing a set of measures to support domestic production. The agency itself was established by a presidential decree dated February 4, 2026, which transferred tasks, functions, and powers in the field of public procurement to the Ministry of Economy and Finance, and also enshrined the course toward developing industrial cooperation and local production.
Support measures include providing preferential financing through commercial banks. It is planned to issue loans at 6% per annum in foreign currency and 12% in national currency for up to ten years with a two-year grace period. The total lending volume may reach 5 trillion soums.
Direct subsidies are also provided for enterprises engaged in import substitution. The state is ready to compensate up to 30% of the costs for developing new goods and services, provided that the funding for one project does not exceed 1 million dollars. Yunusov emphasized that this is not temporary aid to individual firms, but systemic support for local industry. The goal of the reform is for public procurement to transform from a simple supplier selection procedure into an effective tool for stimulating domestic production.
Educational Programs and Market Dialogue
Parallel to financial measures, the agency is beginning to implement educational initiatives for all participants in the public procurement system. Free online courses are being developed jointly with procurement platform operators for public customers. The program will cover issues of registration, document preparation, tender participation strategies, and other practical aspects of procurement processes.
Anvar Mukhitdinov, Chairman of the Association of Public Procurement Participants, stressed that success in this system depends not only on knowing the laws but also on having practical skills, as many disputes and violations in tenders occur due to a lack of information among participants.
The courses will be posted on the official websites of the agency and state procurement operators, ensuring content accessibility for the entire spectrum of market participants—from public buyers to novice suppliers.
The creation of a specialized academy to train specialists in the field of public procurement, based on global experience, is also being discussed. The concept of this academy differs from a university one: the focus is on the practical experience of instructors who work directly in the field and understand the real problems of the system. Training will be designed for both customers and suppliers.
Interaction Mechanisms and Next Steps
Another area of reform is establishing constant contact between the state, business, and the expert community. On June 11 in Tashkent, an open dialogue on public procurement took place, attended by producers, suppliers, government representatives, and experts. More than 100 suggestions, complaints, and appeals from market participants were collected as a result of the meeting.
These appeals were categorized into nine areas, including barriers for SMEs, qualification requirements, technical specifications, bid evaluation, operation of electronic platforms, contractual relations, and proposals for changing the regulatory framework. It is planned to hold such dialogues every two months, and the meetings of the APPP Council—quarterly. Organizers see this mechanism as a way not just to record grievances, but to find solutions based on the consensus of all market participants.
Based on the identified problems, the agency has prepared a draft presidential decree on the in-depth reform of public procurement, which is currently being coordinated with relevant ministries. Yunusov stated that adopting this decree will help solve a number of systemic issues for both entrepreneurs and budget savings. The draft pays special attention to the training and retraining of personnel involved in the public procurement system.
The draft provides for mandatory training for both the private and public sectors. These measures are intended to raise the professional level of participants and minimize procedural errors. Agency representatives assert that this policy aligns with global trends, as public procurement has long been used in developed countries to support national production; for example, the US and China have requirements for the share of domestic products in contracts.
Yunusov added that this policy does not contradict Uzbekistan's obligations to the World Trade Organization, as support measures for local production are permissible within international agreements provided that local industry develops and the budget is used effectively. The approval of the decree, the launch of online courses, the holding of new market meetings, and the start of work on the public procurement academy are expected soon. The effectiveness of the reforms will be measured by the growth in the share of domestic products in public procurement, as the current situation, where local goods cost twice their market price, leads to unjustified budget spending.