The Government of Kazakhstan is consistently working to develop the manufacturing industry as the foundation of the country’s economic stability and technological progress. The priority sectors have been identified as mechanical engineering, pharmaceuticals, light industry, and the chemical industry. The main objectives are to expand local production, reduce dependence on imports, and promote domestic products in foreign markets. Here, we will examine the government support measures provided to enterprises in these sectors.
The manufacturing sector’s share of GDP reached 13.9% in the first quarter of 2025 and only recently surpassed that of the mining industry. Exactly ten years ago, this sector’s contribution to the economy was at a multi-year low, amounting to just 10.1%. In recent years, the manufacturing sector’s share of GDP has averaged 13.3%. The share of trade has also increased significantly—by 2.2 percentage points since 2015, reaching 19.2%.
“It is precisely these two sectors that have ultimately shown the greatest progress over the past nine years, which speaks to the effectiveness of the measures being implemented. Another question that is difficult to answer definitively is how much of the budget is being allocated to all of this and what the profitability of the non-oil sectors is,” explains Daniyar Orazbaev, an analyst at Freedom Finance Global.
Machinery Manufacturing: Growth Areas and Government Support
Machine building remains one of the key sectors for Kazakhstan’s industrial development. The country has implemented major projects to produce locomotives, passenger railcars, agricultural machinery, and trucks through national enterprises. Among them are such leading companies as the Tulpar-Talgo plant in Astana, which manufactures railcars for Kazakhstan Railways, “SaryarkaAvtoprom” in Kostanay, where cars and buses are assembled, and “KAMAZ-Engineering” in Karaganda, which manufactures military and commercial vehicles.
To support the machine-building industry, the Kazakh government uses a range of tools, including preferential lending, leasing programs, subsidies, and export grants. One effective mechanism has been industrial leasing through development institutions, in particular, “BRK-Leasing.” This allows enterprises to upgrade production equipment without placing a heavy burden on working capital. Long-term off-take contracts, which guarantee the sale of manufactured products, also play an important role.
Measures to localize production serve as an additional stimulus for development. Kazakhstan’s machine-building industry is increasing the share of local content by establishing component manufacturing facilities, attracting multinational companies, and developing engineering centers. One example is the assembly of Chevrolet and JAC vehicles, with an increased share of Kazakhstani components. Projects in the agricultural machinery sector are also actively developing—production of seeders, tractors, and combines, which are necessary for the modernization of the agricultural sector, is growing.
On January 1, 2025, new regulations came into effect in Kazakhstan aimed at providing expanded support to small and medium-sized enterprises (SMEs) in the area of public procurement. Specifically, priority is given to SMEs when procuring goods, works, and services included in the Register of Domestic Manufacturers, for amounts up to 50,000 MPR. This provision is enshrined in an Order of the Minister of Finance of the Republic of Kazakhstan and is implemented under the Law “On Public Procurement.” The aim of the changes is not only to support small businesses but also to create a more competitive environment for domestic producers at the state level.
“As part of the ongoing incentive policy, starting in 2024, the government is introducing additional support tools for domestic producers. Key innovations include extending the delivery period under contracts from 15 to 60 days, reducing payment terms from 30 to 10 business days, and increasing advance payments from 30% to 50%. “These measures are aimed at reducing financial risks, increasing liquidity, and strengthening the production sustainability of Kazakhstani enterprises,” the press service of the Atameken National Chamber of Entrepreneurs stated.
Special attention has been given to preferential treatment for companies listed in the Register of Domestic Manufacturers. They are eligible for a conditional 3% discount, which enhances their competitiveness when participating in tenders. “In addition, more than 4,000 items of goods, works, and services have been removed from the national regime; their procurement is possible exclusively from Kazakhstani producers. These include: paper, light industrial goods, furniture, machinery, chemical products, metallurgical products, and software,” the National Chamber of Entrepreneurs clarified.
According to the Ministry of Finance, by May 2025, more than 80,000 contracts had been concluded with domestic producers under the new mechanisms, totaling over 190 billion tenge. All proposed measures were developed in collaboration with the Atameken National Chamber of Entrepreneurs and are aimed at the sustainable development of the domestic economy and reducing dependence on imports in strategic sectors.