What is happening to Kyrgyzstan’s garment industry?

In recent months, alarming reports have increasingly circulated in the information space claiming that “3,000 garment workshops have closed in Kyrgyzstan.” For a country where light industry is one of the key sectors, this sounds like a verdict.

But is garment manufacturing really dying, or are we witnessing a transformation?

Answering this question requires returning to the origins.

The history of Kyrgyzstan’s garment industry does not begin with large factories. It begins with Central Asia’s largest wholesale clothing market — "Dordoi" Bazar.

Before joining the Customs Union, Kyrgyzstan was a key hub for the re-export of Chinese goods. Through Dordoi Bazar, clothing and textiles were sent to Russia, Kazakhstan, and other countries in the region. It was an economy of quick money, high turnover, and minimal processing.

It was during this period that entrepreneurs began to realize that not all products needed to be imported from China — they could be manufactured locally.

This is how the first small-scale sewing workshops emerged — modest operations with 20–30 employees, mostly women. They became the foundation of the future industry.

Olesya Ladygina, Chair of the “Bravo” Garment Association and an entrepreneur with over 25 years of experience, divides the development of the industry into three stages.

Stage one — growth and formation.
The establishment of workshops, rapid skill development, and the emergence of the first markets for sales.

Stage two — the peak.
After 2010, the garment industry became one of the largest employers in the country. Exports increased, and stable trade connections with Russia and other CIS countries were established. Kyrgyzstan even began competing with Turkish manufacturers on quality.

Stage three — the present.
Stricter regulations, higher requirements for quality, deadlines, and documentation. The market has become more complex, and now the winner is not the one with the largest workforce, but the one with a well-structured system.

Kyrgyzstan’s entry into the Customs Union made re-export less profitable.
But this very change became a turning point for the industry.

Re-exporters began transforming into manufacturers.
As entrepreneur Zafar Sulaymanov notes, workshops started operating according to technical specifications, producing for brands and meeting standards. Gradually, Kyrgyzstan carved out its own niche.

Kyrgyzstan has never competed with China or Uzbekistan in large-scale, low-cost garment production. Its niche became fast fashion — quick, flexible production aligned with trends and small batch runs.

As entrepreneur Akylbek Kosmonov notes, Kyrgyz workshops gained a competitive edge through the speed of launching new models, production flexibility, and short delivery times.

This became the industry’s key advantage.

The COVID-19 pandemic became a paradoxical catalyst for the growth of garment manufacturing. The rapid rise of marketplaces like Wildberries and Ozon perfectly aligned with the Kyrgyz light industry model.

During this period, the industry’s turnover, according to market participants, exceeded $1 billion per year. It was the peak period of workshop capacity utilization.

The situation changed after the start of the special military operation.
The sharp fall of the ruble in 2022 directly impacted garment workers’ incomes. But this was only the first wave. The main blow came later: an increase in import VAT in Russia to 22%, and the mandatory “Chestny Znak” labeling — a unique QR code on each item.

For many marketplace sellers, the new requirements proved overwhelming. Stores began to close, followed by workshops left without orders.

At the end of 2025, information began circulating online about the closure of 3,000 workshops. However, there is no official confirmation of these reports.

We surveyed fabric sellers at the “Madina” market — one of the indicators of the industry’s condition. According to them:

2025 was a weak year; sales dropped sharply from September, but the market did not collapse entirely.

Data from the National Statistical Committee also do not confirm a sudden mass closure of manufacturing facilities. We are talking about a downturn, temporary shutdowns, and a restructuring of business models.

We examined data from the National Statistical Committee for January–November 2024 and 2025. Comparing them, here is what the data show:

Large factories have already begun adapting: they switched to a conveyor system — the global standard; optimized processes; and recruited foreign labor.

As Zafar Sulaymanov notes, this is not a pursuit of excessive profit, but an attempt to survive under the new conditions.

“It is important for Kyrgyz seamstresses to move into more skilled and technological positions, such as designer, technologist, or cutter,” — Zafar Sulaymanov.

The government acknowledges the challenges faced by the industry and announces the support measures it has implemented.

Deputy Prime Minister Daniyar Amangeldiev stated that the problems that arose last year have been largely resolved, and the government has established a preferential lending system at 6% per annum and continues to support the garment sector.

Kyrgyzstan’s garment industry is not dying.
The old model is dying — fast, chaotic, and reliant on grey schemes.

What is happening today is a hard reset.
The extent to which businesses and the government can adapt quickly will determine whether the “Made in KG” brand becomes a growth driver or a missed opportunity.