1. Cooperation in Kazakhstan’s Textile Sector
Potential and Opportunities
Embassy of India, Astana

2. Snap Shot of Kazakhstan’s Textile Sector
Market Size: US$2.5 billion (92 % import)
Limited range of textile products production - Produces cotton, cotton yarn, processed cotton, wool yarn, carpets and limited quantities of cotton fabrics
Over 90 % of total domestic demand is met by imports. Local producers supply %.
50% of imports constitute apparels, garments and footwear
2.2 million are employed in this sector
The total harvested area of seed cotton in Kazakhstan is about 1% of the total arable land.

3. Production in Kazakhstan
Raw Cotton: 300,000 – 325,000 tons
Cotton Yarn : 18,000-20,000 tons
Processed Cotton: 50,000-70,000 tons
Cotton Fabrics :22,000 – 26,000 m2
Wool Yarn : tons
Carpets : About 2000 sq metres

4. What is imported and from where?
Total Imports : Between US$ million in last 4 years
Total Imports in 2016: US$ 516 million
Major Import items:
Cotton Fabrics US$ million
MMF materials US$ million
Carpets US$ million
Man Made Staple
Fibres US$ million
Woolen Garments US$ million
Knitted Apparels US$ million
Non-knitted Apparels US$ million
Textile fabrics US$ million
Footwear US$ million
Major Suppliers: China, Russia, Kyrgyzstan , Turkey and Uzbekistan

5. What is exported and to where?
Total Exports: US $ 133 million (2016)
Major export items:
Raw Cotton
Raw Wool
Knitted Apparel and Clothing accessories
Textiles, garments
Non-Knitted apparels
Major Export Target countries: Russia, Tajikistan, Turkey, Moldova, China and Belarus

6. India Kazakh Textile Trade
Kazakhstan’s Imports(2016):US$ mn.
Imports from India (2016): US$ 9.03 million.
India’s share of Kazakh market (2016): about 2%
India’s textile exports to World: US$ bn.
No exports to India from Kazakhstan in last 3 years

7. Tariff Structure Product HS Code Duty in % of value Yarn Silk 5%
Wool
Cotton
Man-made fiber /
0-12
Woven Yarn
5007
0-3
10-13 /
5-16.7
Knit Fabric 60
3-8
Non Woven Fabric
5603 5
Industrial Fabric 59
5-12.5
Apparel
61-62
5-18.3
Home Furnishings 63
Carpet 57 *
Footwear 64
8-18.3
Travel Goods
4202
0.17.7

8. Non-Tariff Barriers
Currently there are no bans, quotas, or other restrictions on textile trade.
Kazakhstan Government requires certain goods to be labeled in both the Kazakh and Russian languages. The following items of textile and apparel products are affected by this labeling law:
Carpets and other textile floor coverings;
Machine-knit or hand-knit clothing and clothing accessories;
Textile clothing and textile clothing accessories (except machine knit or hand-knit)

9. Ontustik” Special Economic Zone in Shymkent City
Kazakhstan created the Ontustik” Special Economic Zone specially for production of textiles in 2006 to offer a range of incentives until 1 July 2030.
Primary activities in the SEZ include weaving and the production of finished textiles, clothing, carpets and leather goods.
About 100 hectares of available land
Developed internal infrastructure
Close to ‘Western Europe–Western China’ transit corridor

10. Incentives Offered at SEZ
As long as the unit stays in the SEZ the following are offered:
0 % Corporate & Income Tax
0% Land Tax
0% Property Tax
Exemption from Social Tax up to 5 years
Exemption from customs duties and VAT for products consumed within SEZ
Low labor cost in the region: average monthly salary USD
Low electricity costs, average rate US$ 2-3 cents per KWh

11. India Kazakhstan Cooperation in Textiles
Bilateral cooperation formalized in 2007.
The Joint Statement “Tej Kadam” issued during the visit of PM Narendra Modi to Kazakhstan in July 2015 identified textiles as one of the “promising areas of cooperation” between India and Kazakhstan.
4 meetings of the Joint Working Group on Textiles (JWGT) already held between India and Kazakhstan. Last meeting was held in April 2017 in Shymkent City.
A 3-member delegation from IL&FS visited Kazakhstan in Sept 2015 to formulate an Integrated Cotton and Textile Strategy for Kazakhstan, Uzbekistan and Turkmenistan.
Kazakh companies have been participating in Buyer-Seller Meets organized in India
by SRTEPC and Textile Conclave.

12. Opportunities for India
The potential of cooperation may be viewed from the perspectives of export of Indian textile goods and services to Kazakhstan as well as an important destination for sourcing raw materials.
Development of the downstream value chain in Kazakhstan
Promotion of exports and investments from India
Technology upgradation and transfer of technology
Providing technical assistance, knowledge sharing and capacity building:

13. Recent Interactions
During the 4th meeting of JWG on textiles held in April 2017, the following were discussed:
Kazakhstan’s participation in ‘Textile India Conclave-2017’
Signing an MoU between Cotton Corporation of India (CCI) and a counterpart organization in Kazakhstan on establishment of regular consultations for mutual development of cotton sector of the two countries
Both sides agreed to examine two spinning projects which are termed as “stressed” for possible take-over by Indian companies.

14. Follow up
Mission sent details of the ‘stressed assets’ to Ministry of Textiles in May 2017.
Ensured Kazakh participation in Textile Conclave 2017
Cotton Corporation of India was requested to forward draft MoU on establishment of regular consultations for mutual development in this sector for consideration of the Kazakh side.

15. Thank You