Kazakhstan, a country long associated with oil, uranium, and metals, is quietly repositioning itself as a more diversified trading nation. While crude still dominates its export basket, the Central Asian republic is pushing to build domestic industries that can replace imported finished goods and sell more processed products abroad.
The numbers tell a mixed story. In the first half of the year, Kazakhstan recorded a trade surplus of over €7.5 billion, with total turnover approaching €62 billion, according to QazTrade, the state trade agency. But imports rose 5.4% year on year to €27 billion, driven by demand for natural gas, power-generation equipment, railway locomotives, gold, enriched uranium, petroleum products, and machinery. That reliance on foreign-made goods is exactly what the government wants to change.
Import substitution as a growth strategy
Officials see an opportunity in the gap between what Kazakhstan consumes and what it produces. The sectors with the strongest potential for import substitution include machinery, pharmaceuticals, advanced agricultural processing, and construction materials. The logic is straightforward: local production can meet domestic demand while also serving neighbouring markets in Central Asia and the Eurasian Economic Union.
“Localising production and implementing investment projects in Kazakhstan can help meet domestic demand while also serving growing demand in neighbouring Central Asia and Eurasian Economic Union,” said Nurlan Kulbatyrov, deputy general director of QazTrade. He pointed to the country’s 4.1% economic growth in the first half of the year, with manufacturing among the main drivers.
To attract capital, Astana has signed 62 investment agreements worth around €32 billion over the past four years. These can offer up to 25 years of legislative stability for projects valued at roughly €52 million. In 2025 alone, the government signed 173 investment contracts worth about €2.6 billion, with incentives ranging from tax breaks to exemptions on import duties for equipment and components, as well as in-kind state grants. Foreign direct investment inflows reached nearly €18 billion in 2025, up 14.4% year on year.
Shifting trade patterns
The composition of Kazakhstan’s exports is changing, though not uniformly. Oil exports fell 3.3%, gas plunged 60.4%, and petroleum products dropped 51.7% in the first half of the year. That decline in traditional commodity exports is partly offset by growth elsewhere. Exports of processed goods rose nearly 18% year on year, with animal feed shipments surging almost 80% to €378 million and sunflower oil exports up nearly 57% to €460 million.
Geographically, the trade map is also redrawing. China remains Kazakhstan’s largest partner, followed by Russia and Italy. But exports to Turkey jumped 94%, to France more than 45%, and to Uzbekistan nearly 40%. Meanwhile, exports to Italy, the second-largest buyer after China, fell roughly 15%. Italy still accounts for more than 17% of total exports, but its purchases remain heavily concentrated on oil. Newer destinations are showing more diversified demand: exports to the UK grew 2.5 times and to Singapore 2.9 times.
This diversification is part of a broader effort to reduce vulnerability to commodity price swings and to build a more resilient economy. The government’s focus on import substitution is not just about self-sufficiency; it is also about creating jobs and adding value domestically.
The rise of the oilseed sector
One of the most promising areas is agriculture, particularly oilseeds. Kazakhstan has the largest agricultural land area in Central Asia and is already a major global supplier of sunflower oil, ranking among the EU’s top three suppliers of sunflower meal. The country aims to increase exports of fats and oils to €1.3 billion by 2028, about 60% above current levels.
“We’re also seeing accelerated diversification towards oilseed crops. For example, sunflower has seen the largest increase in planted area, growing 2.3 times over the past five years,” said Yadykar Ibragimov, chairman of the National Oilseed Processors Association. He attributes the sector’s rapid growth to government support, a strong raw-material base, Kazakhstan’s geographical position, and improved export logistics. The potential is even larger: sunflower cultivation could expand to more than four million hectares across the country.
For European investors and trade partners, Kazakhstan’s shift offers both competition and opportunity. As the country moves up the value chain, it will increasingly export processed goods rather than raw materials, which could reshape supply chains in sectors from food to machinery. The government’s willingness to offer long-term stability and incentives suggests that this is not a short-term trend but a strategic pivot.
Kazakhstan’s experience also resonates beyond its borders. As global trade faces disruptions and countries seek to diversify their supply chains, the Central Asian nation is positioning itself as a reliable partner with a growing industrial base. Whether it can fully wean itself off commodity dependence remains to be seen, but the direction is clear.
