Import Substitution Potential in the Weaving Industry of Azerbaijan

Introduction. The weaving industry, one of the primary industry branches of Azerbaijan, plays a leading role in the economic development of the republic and in meeting the needs of the local population. Although there is a raw material, labour force, and enterprises involved in developing the weaving industry, most domestic demand in this area is provided by the account of imported products. Cotton, the main material for weaving enterprises, is exported in the form of wool and yarn. Aim and tasks. The purpose of the study is to learn the opinions on import substitution, to get acquainted with the state of Azerbaijan's weaving industry, to examine statistical information about the availability of the raw material base and the structure of production, to analyze import and export data on weaving products, to research the opportunities import substitution and to make proposals for increasing local production in terms of import substitution. Results. Following the goal set in the study, the opinions of scientists on import substitution were studied, the state of the weaving industry was introduced, import and export indicators on weaving products were analyzed, the opportunities for import substitution were investigated, and suggestions were made of increasing local production that replaces imports. The weaving sector’s share in the general industry was 0.52% in 2018, and this share increased by 0.15% and reached 0.67% in 2021. As a result of the research on the weaving products market of Azerbaijan, it was determined that despite the presence of raw materials, labour force, and enterprises in this production area, the domestic production capacity was used at a shallow level, and most of the domestic demand was met by imports. Conclusions. Cotton, the primary raw material for product production, is exported with partial processing but without turning into a finished product. The importance of a comprehensive approach to solving existing industry area’s problems, strengthening customs control over imports, and granting concessions to companies were emphasized to increase production, expand the range and replace imports. Applying a strategic and systematic approach to the development of the industry area, implementing systematic measures and strict control over the implementation, and creating a favourable business environment for the industry development were brought to attention as proposals.