Industrial Cooperation in the SCO Space: From Dialogue to Project Integration

Against the backdrop of sanctions wars and instability in the global economy, industrial cooperation between the SCO countries is gaining particular importance. By combining enormous human potential and natural resources, the SCO member states are able to form sustainable production chains and develop complementary industries.

The development of industrial cooperation will strengthen technological independence, expand export and investment opportunities, and reduce dependence on external markets - which is especially important in the context of disruptions in global supplies and increasing competition for resources and technologies.
As of 2025, the SCO countries unite about 47% of the world’s population (3.6 billion people), of which more than 60% are working-age people - an important resource for industrial growth.
In 2024, the combined GDP of the organization’s members reached 30% of the world’s, and foreign trade turnover increased more than 100 times compared to 2001. The volume of exports amounted to about 20% of world exports, with China ($3.5 trillion), India ($442 billion) and Russia ($386 billion) leading the way.
The volume of investments in joint ventures and industrial cooperation of the SCO member countries exceeded $120 billion, which contributed to the introduction of innovative technologies, localization of production and the development of value chains within the region. Current macroeconomic indicators reflect not only the scale of the economy, but also a wide range of industrial potential of the SCO member countries.
Thus, at the present stage, China is the world leader in the production of electronics, mechanical engineering and chemical products, and the country’s industrial production accounts for more than 28% of the world’s volume.
Russia, with its large and diverse resource base, plays a significant role in the global metallurgy, oil and gas sector and defense industry, providing about 12% of global natural resource exports.
India demonstrates significant growth in pharmaceuticals, information technology, and the textile industry. In these sectors, the country increases exports by 15–20% annually.
Iran, possessing some of the largest oil and gas reserves in the world, exports over 2 million barrels of oil annually and develops its petrochemical industry, which accounts for a substantial share of the country’s GDP (around 15%).
Belarus, in turn, is known for its large mechanical engineering complex and production of tractors, trucks, and agricultural machinery—the export of these goods amounts to approximately $3.5 billion per year.
The Central Asian countries are actively developing their mining and processing industries. Kazakhstan is one of the largest exporters of uranium and copper, with industrial production in the country growing by 7% in 2024. Kyrgyzstan and Tajikistan are increasing electricity production and mining, showing stable growth of 5–6% annually. Turkmenistan remains a key gas exporter, expanding its gas industry capacity and exporting 60 billion cubic meters per year.
At the same time, it is important to note that since 2022, the member countries of the organization have been actively discussing and promoting initiatives related to industrial cooperation, formalizing these in final documents.
At the summit in Samarkand (2022), the participants of the Organization adopted a Program to Stimulate Industrial Cooperation among the business communities of the SCO countries.
At the summit in Bishkek (2023), an initiative was approved to create joint platforms for exchanging technological innovations and best practices in industry, aimed at enhancing the competitiveness of enterprises from SCO countries in international markets.
Furthermore, the final documents emphasized the importance of developing cluster and cross-border industrial complexes capable of integrating production chains and optimizing logistics between countries. In this context, special attention is given to the formation of “green” industrial corridors aimed at implementing environmentally friendly technologies and reducing the carbon footprint.
Alongside this, in 2024, at the meeting of the heads of state in Astana, the idea of creating a joint investment fund to finance promising industrial projects was supported, especially in the sectors of mechanical engineering, electronics, and chemical industry. This fund is intended to stimulate innovative developments and production modernization, as well as strengthen industrial cooperation based on mutual benefit.
Thus, the adopted initiatives, high interest in industrial cooperation, and the presence of industrial infrastructure have contributed to the deepening of industrial cooperation among the SCO member states.
For example, Russia and China are actively developing cooperation in strategic sectors such as energy, chemistry, metallurgy, and technology. The largest joint project-the Amur Gas Chemical Complex, being built by SIBUR and Sinopec-is expected to produce up to 2.7 million tons of polymers per year by 2027, becoming one of the largest in the world.
As part of Russian-Chinese cooperation, joint technology parks are being created to develop high-tech industries. Among them are Changchun Sino-Russian Science and Technology Park, China-Russia Innovation Park, and the High-Tech Center at Skolkovo, which houses research structures in the fields of ICT, AI, and robotics.
In the pharmaceutical sector, the first International Institute of Biomedicine and Pharmaceutics was established in Guangzhou in May of this year - an educational and scientific center with laboratories in Russia and China.
Joint production of the Sputnik V vaccine was organized in India with the participation of the Gamaleya Center (Russia) with the pharmaceutical companies Dr. Reddy’s Laboratories and Hetero Biopharma with a total production capacity of more than 100 million doses per year. The project has become one of the largest examples of Russian-Indian cooperation in the field of biotechnology.
In addition, Iran is actively cooperating with China and Russia in the oil and gas sector. China has invested over €2 billion in upgrading the Abadan refinery, which has increased oil refining by 70%. Russia plans to invest another $8 billion in Iran’s gas projects, of which about $5 billion has already been provided for in agreements.
The China-Belarus Industrial Park “Great Stone” is one of the largest and most successful examples of industrial cooperation between Belarus and China. Beijing has invested nearly $1.3 billion in it. By the end of 2025, around 5,000 jobs are planned to be created, including positions for IT specialists. It serves as an important platform for the development of high-tech and innovative manufacturing, as well as for attracting foreign investments.
In this context, it is important to note that Russia, China, and India, as key economies within the SCO, play a significant role in supporting industrialization and the development of Central Asia.
These countries actively promote joint projects in sectors such as energy, mechanical engineering, transport, and chemical industry, contributing to the development of the region’s industrial potential.
China is investing in industrial zones and logistics hubs in Kazakhstan (Khorgos Eastern Gate Industrial Park), Kyrgyzstan (Birlik Industrial Zone), and Tajikistan (Sughd Industrial Park) and is also attracting investment to the Jizzakh Industrial Park in Uzbekistan.
Currently, the Jizzakh Industrial Zone is the only one in Central Asia where the BYD Uzbekistan plant is located, which plays an important role in increasing the industrial potential of the region.
These projects are being implemented within the framework of the One Belt, One Road initiative and contribute to the development of industry and the improvement of transport infrastructure in the region.
China is also actively involved in the renewable energy sector in Uzbekistan. In 2023, agreements were signed on projects to build solar and wind power plants with a total capacity of 4.8 GW.
In this context, the company China Gezhouba Group has completed the construction of the first stage of solar power plants worth $350 million. Their total capacity is 1000 MW.
A Chinese company has begun construction of a 100 MW solar power plant in the Chui region of Kyrgyzstan. The project will create about 500 jobs. In Tajikistan, the state-owned company China Datang Corporation intends to build a solar power plant with a capacity of up to 500 MW in the Sughd region.
Russia, in turn, is diversifying cooperation from the oil and gas sector towards the agricultural, chemical, and automotive industries. Among the significant projects in Kazakhstan are the cultivation of greenhouse tomatoes on an area of 500 hectares with investments of $1.7 billion, the production of fertilizers by EuroChem worth $1 billion, and the production of car tires by Tatneft worth $274 million.
Russia is also actively cooperating with other countries of the region. For example, in early August this year, within the framework of the 7th Kyrgyz-Russian Economic Forum, almost 30 agreements were signed for a total of about $270 million in the fields of aviation, industry, transport, agriculture, digital economy, education, media and product supplies.
India is actively developing pharmaceutical cooperation with Central Asia, investing in local production of drugs and their export. Several joint ventures for the production of generics and vaccines with the participation of leading Indian companies such as Sun Pharma, Dr. Reddy’s Laboratories, Cipla, etc. are already operating in the region.
At the same time, India has provided about 6.5 thousand places for training in the IT field and 1.5 thousand scholarships for students and specialists from the countries of the region.
IT centers have also been opened in all these countries. Among India’s largest projects are the Biomedical Research Centre in the mountains of Kyrgyzstan, the reconstruction of the Varzob-1 hydroelectric power station in Tajikistan, and the Industrial Training Centre in Turkmenistan.
Despite the active agenda of industrial cooperation within the SCO, there are challenges and limitations that hinder further development. In particular:
Firstly, limited transport and logistics connectivity. Insufficiently developed logistics between individual countries (for example, between India and Central Asia via Afghanistan) limits trade turnover. The Chabahar port project, important for transporting goods from India to Iran and further to the Central Asian region, is progressing slowly. Despite the agreement on the transfer of management in 2018, the full deployment of infrastructure is behind schedule.
Secondly, inconsistency of technical standards and regulatory regimes. The lack of a unified regulatory framework in industry complicates the integration of production chains. For example, in mechanical engineering, differences in safety and certification standards between China, Russia and India hinder the joint development and supply of high-precision equipment.
Thirdly, differences in development levels and technological barriers. Within the SCO, significant disparities remain in socio-economic development levels, technological backwardness (especially in Central Asian countries), and shortages of qualified personnel and infrastructure. This creates technological and logistical barriers, increasing the dependence of less developed members on leading powers, and complicates the implementation of joint projects and the formation of regional production chains due to differences in investments, infrastructure, and human capital.
Fourthly, financial constraints and weak investment integration. The absence of a fully functioning SCO Development Bank and the low level of interbank financing hinder the launch of large infrastructure and industrial projects. In 2024, the initiative to create such a bank was discussed again, but no concrete decisions on its establishment have yet been made.
In general, a systemic approach to overcoming current challenges is needed for the effective development of industrial cooperation within the SCO. This includes the harmonization of technical standards, the development of financial instruments, the protection of intellectual property and the deepening of logistics integration - key measures to maintain the pace of industrial cooperation in the context of global competition.
In this context, the Central Asian countries, which are the core of the SCO, can play a special role. With significant natural resources and developing infrastructure, they are capable of becoming not only a solid resource basis for industrial cooperation, but also, in the long term, a key industrial hub for the organization.
Taking into account the above, it is important to note that the upcoming regular meeting of the Heads of State of the SCO in early September of this year in Tianjin will allow us to determine further priorities and specific mechanisms for implementing joint projects aimed at strengthening industrial cooperation and developing an innovative economy in the Eurasian space.

Shavkat Alimbekov, .
Leading Research Fellow at the International Institute for Central Asia