Issue link: https://read.dmtmag.com/i/1544088
66 tobaccoasia Issue 2, 2026 March / April By Eugene Gerden Central Asia's tobacco market, which includes the former Soviet republics that gained indepen- dence in 1991, continues to develop despite tightening regulatory pressure from regional govern- ments and a significant presence of counterfeit products. Home to more than 60 million people, the region—comprising Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan, and Kyrgyzstan—currently ranks among the fastest-growing econo- mies in Asia. Much of this growth stems from deeper integration with Western markets and re- duced economic cooperation with Russia. These shifts have supported expansion across several industrial sectors, including the tobacco segment. Kazakhstan In Kazakhstan—the region's most economically developed country—the tobacco market has shown positive momentum in recent years, although regulatory pressure continues to limit faster growth. Authorities have imposed a range of bans and restrictions on the industry, including a prohibition on vapes and e-cigarettes adopted in April 2024. These measures led to the exodus of many producers into the illegal segment of the market despite the introduction of criminal liability and other penalties for operating without proper permissions and licenses. As a result, the illicit market has expanded, leading to substantial losses for the state. According to experts cited by the Kazakh business newspaper Nur KZ, referencing data from the country's statistical service and reports from the Ministry of Internal Affairs, the share of the illegal tobacco market rose from 1.4% in 2020 to more than 12% by 2025. The increase has resulted in estimated budget losses of more than KZT40 billion (US$88 million). According to recent statements by Dmitry Zhukov, executive director of the Kazakh As- sociation of Producers and Importers of Tobacco Products (QazSpririts) the effective ban on tobacco alternatives in the country has caused significant losses for both the industry and the state. He also noted that government losses linked to illegal tobacco trade may increase further this year as the illicit segment continues to expand. The situation remains complicated by the continued supply of illegal vaping products to the country despite the existing bans. Central Asia's Tobacco Market on the Rise Kazakhstan is a key regional production base for PMI.