Uzbekistan–Kyrgyzstan: From Border Neighbors to Long-Term Economic Cooperation

Relations between Uzbekistan and Kyrgyzstan have, in recent years, become one of the key pillars of regional cooperation in Central Asia. They are built upon a shared border, historical ties, sustained dialogue between the heads of state, and growing interdependence in trade, transport, energy, industry, agriculture, and the development of border regions. As a result, the bilateral agenda is increasingly moving beyond the traditional concept of good-neighborly relations and evolving into a comprehensive economic partnership.

Regular high-level contacts provide the strategic framework for bilateral cooperation, while the Joint Intergovernmental Commission on Bilateral Cooperation remains the principal mechanism for coordinating government policies. In May 2026, the Deputy Prime Ministers of the two countries met on the sidelines of the KazanForum. In June, the relevant ministers discussed current issues related to trade, investment, and economic cooperation, and on June 22–23, the 12th meeting of the Intergovernmental Commission was held in Cholpon-Ata.

Direct ties between the regions remain an important element of this institutional architecture. The Council of Hokims (Governors) of Uzbekistan’s border regions and the Plenipotentiary Representatives of the President of Kyrgyzstan, established in 2017, was upgraded in 2025 through the creation of the Council of Regional Leaders of the two countries. Building on this initiative, Uzbekistan plans to host the first Uzbekistan–Kyrgyzstan Regional Forum. This format has significant practical value for promoting trade, improving logistics, modernizing border crossing points, expanding local markets, and supporting entrepreneurship in border areas.

Business-to-business engagement is also becoming more dynamic. In July 2024, Tashkent hosted a business forum attended by 350 entrepreneurs, resulting in the signing of 20 agreements worth a total of USD 213 million. Preparations for the next business forum in Bishkek demonstrate the continuity of this dialogue and its increasing focus not only on trade but also on production-oriented investment projects.

Trade turnover reflects the growing economic interest between the two countries. By the end of 2025, bilateral trade had reached nearly USD 1.2 billion, representing an increase of 36.4 percent. The positive trend continued in January–May 2026, when trade turnover amounted to USD 468.8 million, up by 43.9 percent. During this period, Uzbekistan’s exports increased by 60.8 percent, while imports from Kyrgyzstan grew by 12.1 percent. The structure of trade also reflects a broad sectoral base, ranging from textiles, food products, construction materials, and machinery in Uzbekistan’s exports to ores, electricity, metals, and plastics in imports from Kyrgyzstan.

To consolidate these positive trends, the two countries are implementing the Program for Expanding Bilateral Trade for 2024–2030. Its objective is to move beyond growth in individual product categories toward a more sustainable trade model through diversification of traded goods, expansion of distribution channels, and removal of existing trade barriers. Within this framework, the parties are addressing issues related to coal, construction materials, livestock, seedlings, and flat glass.

The next stage of cooperation involves strengthening trade, logistics, and industrial instruments. The International Trade Center “Termez” provides Kyrgyz products with an additional southern export route. Trade houses in Bishkek and Tashkent are expected to become permanent platforms for promoting goods, while assembly facilities using components supplied from Uzbekistan will add greater industrial value to bilateral trade.

The investment dimension is supported by the growing presence of businesses in each other’s markets. Today, 450 enterprises with Kyrgyz capital operate in Uzbekistan, while 85 enterprises with Uzbek capital are active in Kyrgyzstan. This demonstrates a gradual shift from simple trade transactions toward more sustainable forms of business cooperation and investment.

Against this backdrop, industrial cooperation is acquiring tangible substance. In Kyrgyzstan’s Chui Region, automobile production has been launched with the participation of the Uzbek side, including the assembly of the Onix, Captiva, Damas, Cobalt, Tahoe, and Tracker models.

At the same time, opportunities for sectoral cooperation extend far beyond the automotive industry. In geology, both countries are interested in jointly exploring several mineral deposits, including iron ore and phosphorites, as well as developing partnerships in the field of critical minerals. In the pharmaceutical sector, cooperation is underway to establish the production of affordable medicines.

The textile and light industry also retains considerable potential. Textile enterprises have already been established in Kara-Balta and Andijan, garment manufacturing facilities are expanding in Bishkek and the Osh Region, and fabric production is being developed in the Chui Region.

Alongside industrial initiatives, energy cooperation continues to hold strategic importance. A central place in the bilateral agenda is occupied by the Kambarata Hydropower Plant-1 (Kambarata HPP-1). It is important to accelerate the conclusion of the intergovernmental agreement on the project while ensuring a balanced approach to the water and energy interests of both countries.

Transport cooperation complements this agenda by directly contributing to the resilience of economic ties. Stable and predictable operating conditions are essential for transport operators in both countries. Therefore, establishing a joint working group and preparing a Joint Transport and Logistics Program for 2026–2028 remain important priorities.

The financial foundation for many of these initiatives is provided by the Uzbek–Kyrgyz Development Fund. Its current portfolio already includes projects in transport, finance, light industry, construction materials, and energy. Expanding the Fund’s project pipeline and considering Kyrgyzstan’s participation in its authorized capital could further strengthen this important financial mechanism.

Cross-border infrastructure deserves special attention, as it translates the broader bilateral agenda into practical benefits for border regions and local communities.

Overall, these developments demonstrate that Uzbekistan–Kyrgyzstan relations are entering a more mature phase of economic cooperation. Expanding trade, industrial cooperation, energy coordination, transport connectivity, agricultural and manufacturing initiatives, together with the development of new financial instruments, are no longer isolated areas of collaboration but increasingly constitute an integrated system of long-term strategic partnership.