Why Kazakhstan Is Restricting Foreign Goods in Public Procurement

Kazakhstan has introduced temporary restrictions on the participation of foreign goods and companies in public procurement in a number of sectors. This concerns a mechanism of exemptions from the national regime that allows only domestic producers to participate in certain tenders. Such measures are already in force in several industries and are aimed at supporting Kazakhstani business. At the same time, the restrictions are temporary and can be applied for no more than two years. An Orda.kz correspondent looked into the issue in more detail.

The Ministry of Finance explained that under normal circumstances, foreign and Kazakhstani suppliers should participate in procurement on equal terms.

The national regime provides for the admission of goods and suppliers of foreign origin on equal terms with Kazakhstan’s.the ministry said in response to a request. 

However, this principle is not absolute. The law allows the state to intervene in the market temporarily.

At the same time, the national regime operates with regard to international treaties ratified by Kazakhstan. This means the market cannot be completely closed to foreign suppliers — restrictions can only be targeted and temporary.

It was through this mechanism that resolutions No. 190 and No. 191 were adopted in 2024. They limited the participation of foreign goods in several major sectors at once — mechanical engineering, construction, chemical and metallurgical products, food, and a number of services.

Who Decides What to Ban?

The Ministry of Finance said it does not make the decisions on the restrictions themselves.

Exemptions from the national regime are established by the relevant sectoral state bodies and transferred to the Ministry of Finance. the ministry said. 

In other words, the lists are drawn up by the relevant ministries — for example, the Ministry of Industry and Construction and the Ministry of Agriculture together with the Atameken National Chamber of Entrepreneurs. The Ministry of Finance performs a technical function in this system: it simply вводит the restrictions into the public procurement system.

Why Does the State Intervene?

The law on public procurement is initially based on a balance between two principles: market openness and support for local business.

Public procurement is based on the principles of providing support to domestic manufacturers. the ministry said. 

Put simply, the state is officially obliged to support its own companies, provided this does not violate international agreements. It is from this principle that the exemption mechanism emerged.

How Are the Restrictions Introduced?

To introduce a restriction, the relevant state body must:

• develop a draft resolution;\
• justify the need for it;
• submit it to the government.

Restrictions do not appear automatically — they must be initiated and approved separately. After that, the list of goods is transferred to the Ministry of Finance, where they are given special status in the procurement system.

What Does This Mean for the Market?

In practice, such restrictions directly change the public procurement system. Foreign companies lose access to some tenders, while Kazakhstani manufacturers gain an advantage.

This can lead to an increase in the share of local business in public procurement and a higher workload for enterprises. At the same time, however, competition decreases, which can affect the price and quality of goods and services.

An important issue remains the duration of the restrictions themselves.

Exemptions from the national regime are established for a period not exceeding two years.the response said. 

Such measures are regularly reviewed — the state is expected to assess whether they have had an effect on the economy and on business.

And this is where the main risk appears.

Will Kazakhstani Manufacturers Be Able to Replace Imports?

The Ministry of Finance stressed that decisions on restrictions should be made on the basis of market analysis, including production volumes and product quality.

In practice, this means the state must understand in advance whether there are enough producers in the country who can meet demand. If such assessments are inaccurate, the consequences may range from rising prices and reduced competition to shortages of certain goods and supply disruptions within the public procurement system.

This is the main risk of the entire system: restrictions work only when the market is ready for them.

Kazakhstan formally maintains an open public procurement system, but through the exemption mechanism it effectively regulates the market in favor of domestic producers. At the same time, the key role in this system belongs not to the Ministry of Finance, but to the sectoral ministries — it is their decisions that determine how balanced the restrictions will be and what consequences they will have for the economy.

Original author: Alina Elgeldina

Read also:

• Kazakhstan’s Public Procurement Hits 5 Trillion Tenge in Q1 2025
• Kazakhstan Implements New Public Procurement Rules
• "The Kerbulak Experience": How Dozens of Firms with Fake Documents Won Tenders Worth Billions