Turkey, a bridge to new Central Asian markets
In a context characterized by deglobalization and geopolitical instability, Turkey and the emerging countries of Central Asia are becoming important markets for Italian-made products. Business opportunities and drivers for entry
The last few months have confirmed the trends seen at the beginning of the year. Deglobalization, trade disputes, and the failure to de-escalate military conflicts are penalizing Italian exports. At the time of writing, monthly data for April 25 (ISTAT) indicate a 2.8% decline in exports; while year-on-year growth is 0.4% (in value) but down 3.7% in volume. This confirms the urgent need for exporters to turn their attention to new markets and opportunities, also looking at the initiatives put in place by the 'Italian system'.
Turkey and Central Asia are identified as target countries in the Italian Export Action Plan presented on April 15 by the MAECI, whose stated goal is to bring the volume of Italian exports to 700 billion euros by 2027, focusing primarily on high-potential non-EU markets. It should be noted that in 2024, Italian exports exceeded a total of 623 billion, 305 billion of which were to non-EU markets. The initiative involves the entire public system supporting internationalization (ICE, Simest, SACE, CDP), which makes its intervention tools available in a coordinated and targeted manner in the market areas covered by the Plan. For an overview of what the Plan envisages for the markets covered by this contribution, please refer to page 10 of the document (https://export.gov.it/node/3186) for Turkey and page 24 for Central Asia with the relevant country/region fact sheets. In this article, we will discuss these two countries together, despite their extreme differences in terms of economic weight and per capita income—from $31,252 in Turkey to $4,813 in Kyrgyzstan (2022 data)—due to the importance of the ties that exist between them.
The fact that these are high-potential markets is also, but not only, evidenced by some figures. In 2024, Italian exports to Turkey amounted to 17.6 billion euros (+23.9% on 2023), while last year we exported 2.16 billion euros to Central Asia (+11.3% on 2023). Turkey ranks 10th among our importers, and our exports to Istanbul account for 2.8% of the total.
For Central Asia, the report identifies agribusiness as one of the four priority sectors for exports. Looking at the latest economic growth forecasts – EBRD Regional Economic Prospect May 2025 – growth for Central Asian countries is estimated at 5.5% in 2025 and 5.2% in 2026, and 2.8% and 3.5% for Turkey.
Let's look at the details for each Central Asian country. For Uzbekistan, the most populous country in the area (33 million inhabitants), economic growth estimates are 6% for both 2025 and 2026. The forecasts for Tajikistan – together with Kyrgyzstan, the smallest economies – are 7% in 2025 and 5.7% in the following year. Kyrgyzstan is expected to see a 7% increase in national output this year and 6% in 2026. Turkmenistan is expected to grow by just over 6% in both 2025 and 2026, driven in particular by infrastructure and agriculture. Finally, Kazakhstan, the region's largest economy, is forecast to grow by 4.9% in 2025 and 4.5% in 2026. Given the importance of the oil sector, this will depend heavily on oil prices and demand from China, the main importer of this commodity.
�Opportunities and drivers for entry. Moving from numbers to identifying ideas that can help companies seize opportunities and define drivers for entering these markets, the first caveat is to clearly distinguish the Turkish market from those of Central Asia. This also applies to agriculture and agro-industry. First element: market knowledge. Tween Italy and Turkey, there are well-established commercial and collaborative relationships between companies, which are evident even when looking at trade data. Last April, over 300 companies from both countries attended the Italy-Turkey Business Forum in Rome. In addition to imports and exports, there are numerous examples of Italian investment in Turkey (around 1,600 companies according to Infomercatiesteri.it) and Turkish investment in Italy (the stock of Turkish investment in Italy is worth €2 billion). In practical terms, this means that there is a high level of knowledge of each other's commercial practices and legal frameworks, with a good range of support available from specialized public and private actors for companies entering this market for the first time. Another factor that should not be underestimated is that trade relations between the two countries cover a wide range of areas: from infrastructure to defense, from cooperation in the field of household appliances to the long-standing partnership in textiles/clothing, but also more recently in the ceramic-sanitary and agri-food sectors (in addition to our imports of dried fruit, there are now partnerships in the cultivation of hazelnuts, for example). Turkey's commercial information system is another positive factor, as it will be possible to integrate the information available in Italy with that provided by websites belonging to local authorities and associations. Examples include DEIK, Tusiad, the Ministry of Trade, and Invest in Turkiye. Even if we are not interested in direct investment, 'browsing' the local websites that promote them gives us a description of the sectors and supply chains that are also of great interest to exporters.
The current economic and financial situation in Turkey indicates, as emerged from the recent London conference on "Türkiye's economic transformation and growing investment potential," a phase in which the country—due to a high current deficit and high inflation—must focus on exports (which account for 20% of GDP). The Turkish Minister of Finance, emphasizing that the country's main trading partner is the EU, expressed confidence that trade with the EU could reach €400 billion, pointing to services, infrastructure, and agriculture as the leading sectors. To achieve these objectives, agriculture and manufacturing with high added value are needed, capable of responding to the demand of a young population that requires new products on the domestic market. These elements can be part of the offer of Italian companies in terms of both sales and commercial and productive collaboration.
However, one point for reflection concerns above all Turkey's role as a regional trading power capable of acting as a bridge to the markets of Central Asia and the South Caucasus. Let us not forget that the linguistic link (Turkic-speaking countries) binds all the markets mentioned here, with the exception of Tajikistan, and that since 2009 there has been an Organization of Turkic-Speaking States, of which Azerbaijan is a member. In this perspective—Turkey as a bridge to Central Asia—the experience of highly specialized Italian companies that have decided to participate in tenders led by Turkish companies, even in third markets, should be interpreted in the infrastructure and major works sector. In the agro-industry, too, there are cases of joint supplies to African markets, for example.
For Central Asian countries, in addition to verifying the possibilities for initial entry through Turkish trading, it is clearly even more important to follow the initiatives being implemented by the 'Italian system' as part of the aforementioned Action Plan for Italian Exports.
The final consideration concerns the international funding that Central Asian countries receive for cooperation and development aid, which very often targets agriculture and the complementary sector of water management (supply and access, water networks, irrigation systems). We devote the final section of this contribution to this type of intervention.
The agricultural sector in Turkey and Central Asia. Turkish agriculture ranks 10th in the world, with arable land accounting for 50% of the territory and almost 25% of the workforce employed. The main crops are wheat, sugar beet, cotton, tomatoes, and various types of fruit and vegetables. It is the world's leading producer of apricots and hazelnuts. Turkey is a major consumer and importer of nuts, particularly almonds and walnuts. Due to the importance of agriculture in its economy, Turkey has developed significant local production of agricultural machinery and equipment. A key driver of this process has been the development of the Southeast Anatolian Project, which has increased irrigable land by 1.8 million hectares. The opportunity for large-scale investment has therefore strengthened production capacity in the sector, which is divided into two segments: agricultural machinery/equipment and tractors. There are estimated to be over 1,000 companies operating as manufacturers and/or importers. A portion of production is exported, with Germany, France, Poland, Spain, and Italy among the main importers.
Central Asia. At the time of the break-up of the USSR in 1991, these states had an agricultural sector that accounted for up to 45% of gross domestic product and employed between 20% and 50% of the workforce. In the years that followed, due to the end of economic interdependence with Russia and the development of the energy sector, the importance of agriculture declined significantly. However, the sector remains important for its contribution to GDP (around 20%), especially in Uzbekistan, Kyrgyzstan, and Tajikistan. Data available from international sources confirm that these three countries have the greatest potential for development in the sector, where there is a real demand for modernization and efficiency improvements, also aimed at exporting local agricultural products.
Uzbekistan, with its 33 million inhabitants and 27 million hectares of agricultural land (60% of the total), is the most interesting country in terms of sectors. Its production is concentrated on cereals, oilseeds, cotton, and fruit and vegetables. It is also a well-established exporter of cotton, grapes (fresh and dried) and cherries. The country has received significant international funding for the development of its water system, access to water and agro-industrial projects. A recent initiative has focused on agricultural efficiency and climate resilience in the livestock sector.
Kyrgyzstan (population 6.2 million) has approximately 10 million hectares of agricultural land (50% of the total). Production focuses on cereals and fruit and vegetables. The sector suffers from the critical issues arising from the terrain, a series of mountains and narrow valleys, but has significant water resources, being the only country in Central Asia that is almost self-sufficient. It benefits from international funding for projects in the water management and irrigation systems sector and for the development of climate-resilient agriculture that focuses on green technologies.
Tajikistan (population 6.7 million) has approximately 4.7 million hectares of agricultural land (30% of the total) and produces mainly cotton, cereals, fruit and vegetables, and oilseeds. Here too, agriculture has to contend with a challenging natural environment: 93% of the country is covered by mountains. The availability of water allows for irrigation over large cultivated areas and presents opportunities for technological innovation. The sector is driven by a modest food industry. The main exports to foreign markets are cotton, vegetables, and dried fruit. Recently, the EBRD (European Bank for Reconstruction and Development) has financed an initiative in the field of tractor production and assembly for sale both on the local market and in neighboring countries.
Payment instruments, trade finance, and banking system. With regard to the banking system of these countries, it makes sense to group Turkey with the countries of Central Asia. In fact, it is precisely the Turkish banks, which are more solid and advanced, that are able to play a role in intermediation and transaction management, thanks to their presence and historical ties with those countries. Turkey has a widespread banking system—traveling around the country, one can see the large number of branches, especially in urban areas—consisting of large banks, including foreign ones, with a strong focus on services for international trade. Indirect evidence of this is that many Italian banks, within their financial institutions offices that maintain relations with foreign banks, have a desk dedicated to this market. In Turkey, in addition to a few Italian banks, there is a significant and commercially very proactive presence of Spanish, British, and Dutch banks. When it comes to payment instruments for machinery products, bank transfers are not the usual method in these markets and for new counterparties. The Turkish banking system is able to handle all the most complex forms of payment: collection, documentary credits and international guarantees governed by the rules of the International Chamber of Commerce (ICC). Trade finance and export finance instruments are also widely used to finance transactions based on commitments made by the banks of the parties.
Turkish banks are known for their commercial dynamism, and may even propose their own customers' transactions with Italian counterparties to several Italian banks in order to obtain the best conditions. As always in relations between banks, the breadth of relationships is rewarding, not only in terms of channeling transactions but also in terms of collaboration on foreign exchange, participation in pool transactions, mutual credit limits, and maturities. Especially when taking on risks (such as confirming a documentary credit), Italian companies should consult their banks in advance to check: the Turkish banks they work with, their willingness to intervene, the maximum duration for risk assumption, and the costs. These factors clearly have a direct impact on the formulation of the commercial offer.
Central Asia. The banking system in these countries is characterized by a sector dominated by state-owned banks and an ongoing privatization process which, although supported by banks and international organizations, must contend with a regulatory environment whose standards have yet to be brought into line with international standards, a not fully liberalized exchange rate regime, and property, commercial, and dispute resolution laws that are only just beginning to be reformed. In this scenario, it is essential to discuss the operation with your bank from the outset, checking the expected costs and the ability to provide assistance in the foreign country, including through direct correspondents or third countries (e.g., Turkish banks).
International financing. As already indicated, opportunities for businesses – especially for Central Asian markets – can be found in initiatives financed by international financial institutions and development funds. On the other hand, the development process of these economies and, for the agro-industrial sector, the urgent need to improve the efficiency and strengthen local private companies (which were effectively created after the end of the USSR) can only proceed with international aid. A number of organizations are particularly active in the area: the EBRD, the European Bank for Reconstruction and Development, the ADB Asian Development Bank, the World Bank, the European Union, but also other development agencies such as the Japan International Cooperation Agency and Gulf funds. Italy is a member of many of these institutions and recently (May 2025) hosted the 58th ADB Annual Meeting in Milan for the first time.
Business opportunities. Monitoring of funded projects or sectors by companies is an activity that can certainly help to identify potential business opportunities. Let's try to summarize them. Calls for tenders: these finance projects that often benefit a local authority and involve international tenders (open to companies from participating countries) for the services/products being financed.
Sectors funded: knowledge of the projects funded makes it possible to identify those in which potential counterparties can access subsidized funds, improving their repayment capacity.
Risk mitigation instruments: for years, the EBRD has been running the Trade Facilitation Programme (TFP), through which it issues guarantees to exporter banks to cover political and commercial risks of non-payment. This allows EBRD partner banks (including Italian banks) to share their risk with the EBRD and, in practical terms, to have more scope to confirm, for example, letters of credit from these countries or guarantees issued by their companies in favor of Italian companies. Risk-sharing instruments with the Italian banking system are also made available by other international organizations.
To give an indication of the value of these interventions, we can cite the latest EBRD data for the three countries we have considered with a greater focus on agro-industry. In Uzbekistan, the EBRD has invested €3 billion in around 90 operations since 2017, in Tajikistan €509 million in 73 operations since 2015, and in Kyrgyzstan €179 million in around 70 projects since 2017.
The main sectors receiving funding – excluding public sector reform – have been infrastructure, energy, transport, water management, and access to water. Water efficiency measures are the most interesting to monitor because they are also linked to the development of local agriculture. We have already mentioned some projects and initiatives financed in the agro-industry sector.
A few final thoughts on this last section. Participating in tenders – or establishing forms of collaboration with companies that participate in them – is a way to facilitate access to new markets in Central Asia, bearing in mind that this can also minimize the associated risks. We are talking about markets that are not currently subject to sanctions, but are nevertheless high-risk due to their proximity to sanctioned countries.
The rules laid down by the funding body minimize this risk, as they are subject to a pre-assessment by the latter. In terms of payments, the forms adopted are in line with international standards and in some cases are made directly by the foreign funding body.
Since access to these operations requires the use of your own bank, it will be useful to check with your bank to see if it has already worked with the funding body.
