Uzbekistan has signed an MoU with the Indian Steel Association to potentially import 1 million tonnes of steel annually, aiming to lower logistics expenses. This shift from current supply routes opens a new export avenue for Indian manufacturers. Investors should monitor how this trade corridor develops against existing logistical hurdles.
Uzbekistan is exploring a pivot in its steel sourcing strategy by looking toward India. The Uzbekistan Metallurgy Association recently signed a Memorandum of Understanding with the Indian Steel Association to formalize cooperation. This move is primarily driven by the need to address the high logistics costs the landlocked Central Asian nation currently faces when importing steel from China.
Currently, Uzbekistan imports approximately 1 million tonnes of steel annually. The logistics expenses for these imports, particularly via sea routes from China, can reach $100 per tonne. By establishing a supply relationship with India, Tashkent aims to optimize its supply chain and reduce these substantial shipping burdens. For the Indian steel sector, which exported 9.1 million tonnes in the 2025-26 fiscal year, securing a foothold in this market offers a strategic opportunity to diversify export destinations beyond traditional markets like the European Union and the Middle East.
The Indian Steel Association, which represents the country's policy interests, includes major domestic producers such as Tata Steel, JSW Steel, Jindal Steel and Power, and ArcelorMittal Nippon Steel India. While this initial agreement focuses on manufacturing, technology, and logistics collaboration, it paves the way for these companies to potentially negotiate supply contracts if the logistics route is proven to be commercially viable.
This development occurs against the backdrop of strengthening bilateral ties. Trade between India and Uzbekistan reached $1.3 billion in 2025, with both governments setting a goal to double this figure within three years. Beyond trade in finished goods, Uzbekistan has expressed interest in attracting Indian investment for its own mining and metallurgy sectors, specifically targeting resources such as copper, gold, uranium, and rare earth elements.
Investors should, however, remain aware of the inherent risks. Uzbekistan is a landlocked nation, which creates complex and often expensive logistical challenges for physical trade regardless of the supplier. Additionally, the Indian steel industry itself faces long-term structural pressures. For instance, domestic steel manufacturers rely on imports for approximately 90% of their metallurgical coal requirements, which can affect production costs. The success of this export initiative will depend on whether Indian companies can build a reliable, cost-effective transportation network that can compete with the established global logistics chains currently serving Uzbekistan. Market participants should track how these infrastructure and energy security factors evolve as the trade dialogue progresses.