THE ROLE OF THE LIGHT INDUSTRY AS A DRIVER OF NATIONAL ECONOMIC DEVELOPMENT

10 https://www.asr-conference.com/ II SHO‘BA: Milliy iqtisodiyotni modernizatsiya qilish va xalqaro integratsiyani chuqurlashtirish THE ROLE OF THE LIGHT INDUSTRY AS A DRIVER OF NATIONAL ECONOMIC DEVELOPMENT Author: Sa’dullayeva Sayyora Nasillo qizi 1 Affiliation: Doctoral student Tashkent State University of Economics 1 DOI: https://doi.org/10.5281/zenodo.17564305 ABSTRACT This article analyzes the role of the light industry in the national economy and its importance as a driver of economic growth. The study examines how the increase in the share of industrial products in exports contributes to expanding the country’s export potential, strengthening the national currency, and improving the trade balance. In addition, the share of the light industry in gross domestic product and its significance in the global economy are studied. Based on the findings, conclusions and recommendations for further development of the sector are provided. Keywords: gross domestic product, light industry, industry, export, textile, trade balance. INTRODUCTION In recent years, while systematic reforms aimed at modernizing and diversifying the national economy have been actively implemented, ensuring balanced growth in the industrial sector — an integral part of the economy — has become one of the country’s key priorities. The effective use of scientific achievements and the introduction of innovations in industrial sectors contribute to the technological renewal of the economy and improvement of the competitive environment. In short, the development of industry serves to enhance the population’s living standards and promote overall social progress. MATERIALS AND METHOD In the global light industry sector, groups of countries have emerged that act as suppliers of raw materials, manufacturers of finished products, and consumers. In particular, China is the world’s largest exporter of finished textile products, followed by Bangladesh, Vietnam, India, and Turkey. China is the undisputed leader in both textile production (fibers, fabrics, and yarns) and clothing manufacturing, possessing the largest production chain and export capacity. In 2022–2023, China accounted for about 30% of the global apparel export market. 1 According to WTO and UN Comtrade data, Bangladesh has shown significant growth in clothing exports, becoming the world’s second-largest apparel exporter due to its low labor costs. In the consumer market, China remains the main consumer, while the United States represents the largest import market in value terms. WTO and fashion industry statistics also identify the European Union as one of the leading importers with the largest market share. 2 1 International Yearbook of Industrial Statistics – edition 2023 2 WTO - Global value chains sectoral profiles textiles and clothing industry and world trade statistical review – 2023 “O‘ZBEKISTON – 2030 STRATEGIYASI: AMALGA OSHIRILAYOTGAN ISLOHOTLAR TAHLILI, MUAMMOLAR VA YECHIMLAR” 11 https://www.asr-conference.com/ II SHO‘BA: Milliy iqtisodiyotni modernizatsiya qilish va xalqaro integratsiyani chuqurlashtirish Cotton and synthetic fibers constitute the main raw materials for light industry. The major suppliers of these raw materials are India, the United States, China, Brazil, and Pakistan. China also leads in the production of synthetic fibers and petrochemical materials such as polyester, making it an indispensable part of the global textile industry. 3 RESULT AND ANALYSIS As a result of ongoing reforms, Uzbekistan’s industry has evolved from a purely production-oriented sector into a strategic driver of economic growth. The implementation of measures aimed at forming modern industrial infrastructure has led to an increase in the share of industry in the country’s gross domestic product (GDP). Therefore, the share of industrial output within the gross domestic product deserves particular attention. (Figure 1) Figure 1. Dynamics of GDP and Industrial Output Growth in the Republic of Uzbekistan 4 According to the data presented in Figure 1, during the period of 2020–2024, the shares of GDP and industrial production in the economy of the Republic of Uzbekistan demonstrated steady growth, though with varying intensity. In 2020, the gross domestic product (GDP) increased by 17.9%, while industrial output grew by 18.5%. In 2022–2023, however, a short-term slowdown in industrial growth was observed (from 121.35% to 119.2%), which can be explained by disruptions in global logistics chains and fluctuations in raw material prices. Nevertheless, the 26–30% share of industry in GDP does not yet indicate full leadership of the sector in the national economy. This suggests that there remains significant potential to further expand the scale and capacity of industrial production. The economic essence of the light industry lies in increasing the added value of raw materials — that is, transforming them into high-income products through processing. The development of light industry directly contributes to increasing 3 Food and agriculture organization of the United Nations - www.fao.org 4 Based on the official website of the State Committee of the Republic of Uzbekistan on Statistics, under the authorship of the author — Siat.stat.uz. 118,5 119,5 120,5 121,7 121,3 117,9 123,7 121,3 119,2 133,6 110 115 120 125 130 135 2020 2021 2022 2023 2024 GDP Light industry 12 https://www.asr-conference.com/ II SHO‘BA: Milliy iqtisodiyotni modernizatsiya qilish va xalqaro integratsiyani chuqurlashtirish female employment, especially in the textile and garment sectors, and facilitates the formation of regional industrial clusters (from raw material to finished product). In the Republic of Uzbekistan, all industrial sectors are grouped into 18 major complex industries. 5 The term industrial structure refers to the composition of industries, the proportions among them, and their interrelationships. In particular, the light industry includes, apart from large-scale textile and leather production, branches such as silk production, carpet weaving, embroidery, and the manufacture of consumer goods. Due to the ongoing reforms in the textile and leather sectors, light industry plays a vital role in ensuring employment and increasing export revenues. Currently, around 430,000 people are employed in this sector. Light industry accounts for 14% of total industrial production and 16% of national exports. In the first nine months of 2025, industrial enterprises in Uzbekistan produced goods worth 773.8 trillion soums, which represents a 6.8% increase compared to the same period of the previous year. 6 As of October 1, 2025, there were 57.8 thousand active industrial enterprises in the country. The largest shares by type of economic activity are distributed as follows 7 : • Food production – 11.5 thousand enterprises (20.0%) • Other non-metallic mineral products – 8.2 thousand (14.1%) • Clothing production – 5.8 thousand (9.9%) • Manufacture of fabricated metal products – 4.7 thousand (8.1%) • Furniture production – 4.0 thousand (6.9%) • Textile production – 3.6 thousand (6.2%) Rubber and plastic products – 2.7 thousand (4.7%) CONCLUSION From our perspective, light industry remains one of the most important and promising sectors of the economy, still possessing significant potential for diversification. To accelerate the development of the sector, it is advisable to: • introduce digital technologies into production; • expand the domestic raw material base; • strengthen export and branding activities; • improve vocational training and workforce qualification; • deepen the cluster system (from raw material to finished product); • enhance financial and investment support, including tax incentives; • attract foreign and private investments; and • promote green bonds as a financing mechanism for environmentally sustainable production. According to forecasts, by 2027, Uzbekistan’s annual textile exports are expected to reach USD 10 billion, strengthening the country’s position as a regional textile hub and further boosting the export of finished products. To help achieve these goals and sustain modernization momentum, the United Nations Industrial Development Organization (UNIDO) has launched the project “Sustainable Modernization of Uzbekistan’s Textile and Garment Industry.” This initiative is expected to benefit local communities by reducing poverty, increasing employment, 5 O.Abdurahimov – Industry economics 2009 Tashkent 6 From the speech of the President of the Republic of Uzbekistan on 12 December 2024, “Discussion of results and proposals in the light-industry sector”, reported by Uzdaily.uz. 7 Prepared based on the data of the State Committee of the Republic of Uzbekistan on Statistics. 13 https://www.asr-conference.com/ II SHO‘BA: Milliy iqtisodiyotni modernizatsiya qilish va xalqaro integratsiyani chuqurlashtirish and enhancing economic diversification, while also accelerating Uzbekistan’s transition to a digital economy. 8 REFERENCES 1. International Yearbook of Industrial Statistics – edition 2023 2. WTO - Global value chains sectoral profiles textiles and clothing industry and world trade statistical review – 2023 3. Food and agriculture organization of the United Nations - www.fao.org 4. Official website of the State Committee of the Republic of Uzbekistan on Statistics— Siat.stat.uz. 5. O.Abdurahimov – Industry economics 2009 Tashkent 6. The speech of the President of the Republic of Uzbekistan on 12 December 2024, “Discussion of results and proposals in the light-industry sector”, reported by Uzdaily.uz. 7. The United Nations Industrial Development Organization (UNIDO) website 8 Based on data from the United Nations Industrial Development Organization (UNIDO) website