Uzbekistan, Mongolia strengthen trade & economic cooperation

The Uzbekistan Embassy in Seoul announced on June 24 that the Central Asian country and Mongolia were witnessing growing momentum in their trade and economic relations, underpinned by Mongolia’s resource-rich economy and Uzbekistan’s expanding industrial and export capabilities.

Both countries are exploring new avenues for bilateral cooperation, particularly in processing industries and high-value-added production.

According to the Asian Development Bank, Mongolia maintained macroeconomic stability in 2024, with GDP rising by 4.9 percent to reach $21.3 billion.

Services accounted for the largest share of GDP at 46.8 percent, followed by mining and quarrying at 25.2 percent, agriculture at 13 percent, and other sectors comprising the remaining 15 percent.

The mining sector remains the backbone of Mongolia’s economy, with over 8,000 mineral deposits and 1,200 active mines extracting more than 80 mineral types. Coal, iron ore, copper, uranium, oil, and gold form the core of the country’s mineral wealth, with coal reserves alone estimated at 33.4 trillion tonnes.

In 2024, foreign direct investment into Mongolia continued to favor the mining industry, which attracted 70 percent of total inflows. The remaining 30 percent was channeled into trade, food processing, finance, and other sectors. Key industrial outputs included coal, processed milk, cement, electricity, copper, flour, metal products, and gold.

Agriculture in Mongolia remains primarily focused on livestock breeding.

The national herd reached 67 million head in 2024, supporting raw cashmere production of over 10,000 tonnes, or around 40 percent of global output.

However, only about 4,500 tonnes are processed domestically. The processing sector currently employs around 10,000 people, 90 percent of whom are women. The Mongolian government aims to reach 100 percent primary processing and 40 percent deep processing of raw cashmere by 2028.

Mongolia’s foreign trade turnover reached $27.4 billion in 2024, marking a 12.3 percent year-on-year increase.

Exports totaled $15.75 billion and imports stood at $11.65 billion, yielding a trade surplus of $4.1 billion.

Mineral commodities dominated exports, with coal ($8.43 billion), copper concentrate ($2.65 billion), and gold ($835 million) as leading products.

China, Switzerland, Singapore, South Korea, and Russia were top export destinations.

On the import side, petroleum products led at $2.15 billion, followed by passenger vehicles, trucks, construction equipment, and telecommunications hardware. Mongolia’s key import partners were China, Russia, Japan, South Korea, and the United States.

Bilateral trade between Uzbekistan and Mongolia has grown over tenfold in the past five years, from $1.9 million in 2019 to $20.4 million in 2024.

Uzbekistan’s exports rose from $1.5 million to $15.1 million, while imports from Mongolia increased from $519,000 to $5.31 million. In 2024 alone, trade volume between the two nations rose by 46.8%, driven by balanced growth in both exports and imports.

The first quarter of 2025 further underscored this growth trajectory, with bilateral trade reaching $9.7 million — 2.4 times higher than the same period in 2024.

However, Uzbekistan’s exports declined by 33.1 percent, while imports surged over tenfold, fueled by increased deliveries of Mongolian machinery, transport equipment ($4.9 million), and food products ($2.4 million).

Looking ahead, both countries strive to see strong potential for deeper cooperation.

Uzbekistan is well-positioned to expand its exports to Mongolia, especially in areas where it enjoys a competitive advantage.

Furthermore, both sides are exploring joint ventures in Mongolia to process wool and leather and manufacture textile goods.

A key initiative could be the establishment of facilities for cashmere spinning, dyeing, and garment production, drawing on Uzbekistan’s experience in textile manufacturing.