This Export Opportunities Analysis offers a strategic roadmap to strengthen the export readiness of Georgian small and medium-sized enterprises (SMEs). 

Building on a comprehensive examination of export trends and trade facilitation prospects, the study highlights priority measures to boost competitiveness. Georgia’s unique geographic location, preferential trade regimes, and expanding export aspirations provide a strong foundation for advancing market diversification, improving product sophistication, and fostering inclusive and sustainable export-led growth.

This document analyses Georgia’s current export performance and sectoral opportunities, based on extensive desk research, data analysis, international benchmarking, and qualitative insights from interviews and consultations with exporters, non-exporters, business associations, and relevant institutions. 

Georgia is geographically well-positioned, surrounded by high-demand markets estimated at US$7.8 trillion in import value. Thanks to its proximity and strong trade ties, Georgia is well-positioned to expand its share in these markets. There are significant opportunities for growth that can be unlocked by diversifying products and increasing market penetration. Georgia’s export markets are sizeable but lack diversity, highlighting a dependency issue for the country’s exports. At the same time, Georgia’s access to the EU market presents further opportunities for expansion and diversification.

Georgia holds significant untapped export potential, constrained by structural production challenges, limited product diversification, and logistical bottlenecks. Small and medium-sized enterprises (SMEs) are particularly affected, facing significant barriers to entering and expanding in international markets.

Coordinated efforts, such as targeted investments, tailored technical assistance, and strategic partnerships, will help integrate Georgian businesses into regional and global value chains. Continued improvements in product quality, expansion into new sectors, infrastructure upgrades, and building international market confidence will drive Georgia’s transformation into a dynamic and inclusive export leader.

Conducted by Ernst & Young, this research was funded by the European Union (EU) under the ‘Inclusive Access to Markets’ (IA2M) project implemented by the United Nations Development Programme (UNDP). 

Trade Ecosystem in Georgia: Key Findings

Production and Industrial Constraints: Georgia has made notable progress in expanding its industrial output, with encouraging growth across key sectors. With this, there remains a significant opportunity to further enhance the value and sophistication of manufacturing, especially by increasing technological advancement and diversifying production. Currently, manufacturing is focused on a few major sectors, including food, beverages, apparel, metals, and plastics, which are primarily low- to medium-tech industries. By broadening the product range and boosting value addition within these sectors, Georgia can unlock even greater potential for long-term, sustainable growth.

Capacity Utilisation and Quality: Georgia’s industrial sector has considerable room to grow, with ample potential to boost capacity and output. By attracting foreign investment, upgrading infrastructure, strengthening workforce skills, and advancing research and development, Georgia can significantly increase its production value. Continued efforts to improve product quality, enhance value addition, and embrace greater technological sophistication will further position Georgia as a competitive player in international markets.

Export Competitiveness and Trade Facilitation: Export growth to the EU has been positive since the signing of the Deep and Comprehensive Free Trade Area (DCFTA) in 2014. The challenges of meeting regulatory compliance, especially regarding product standards and certifications, are still present. 

Branding and Perception: While some of the Georgian products have a high brand perception and reach in the global market, there are significant opportunities to strengthen awareness and perception in other sectors. Awareness of Georgian products is limited in Western Europe and North America, but in the Baltic and Central-Eastern Europe, the food and beverage category is increasingly gaining traction. This offers opportunities to strengthen brand perception and expand into new markets.

Export Performance, by Product: Key Findings

• Hazelnuts: Georgia has the potential to expand, particularly in targeting markets such as Italy and other European countries.
• Berries: Although current export levels are limited, Georgia's early harvest season provides a competitive edge in the EU market, signalling promising export potential.
• Apparel: The greatest opportunities for Georgian apparel exports are in the USA and EU markets, where demand is strong, particularly for fashion items such as t-shirts and trousers. By expanding mass production capacity and further developing its apparel sector, Georgia can increase its export potential and tap into new market opportunities.
• Animal & Fish Feed: Leveraging Georgia’s abundance of natural ingredients and accessible technologies, this sector holds strong export potential and opportunities for further growth in international markets.
• Pet Food: Demand for pet food is rapidly increasing, especially in Europe and North America. Although this is an emerging sector for Georgia, its ability to offer competitive pricing in line with global trends positions the country well to capture significant export opportunities.
• Construction Materials: Georgia’s proximity to export markets such as Uzbekistan and Poland offers promising opportunities for expanding its construction materials sector.
• Packaging: The packaging industry is well-positioned for growth, with high-potential target markets including the USA, Türkiye, and France.
• Wine: Georgia’s wine sector enjoys strong export prospects. Further increasing production capacity and further strengthening branding efforts can help capture greater value in key international markets.
• Spirits: Georgia’s spirits sector benefits from strong price competitiveness in regional markets. Investing in brand development will enable the sector to expand its reach and compete more effectively on a global scale.
• Toys: A promising sector, where Georgia’s use of natural and sustainable materials provides an edge in terms of quality and environmental appeal.
• ICT Services: Georgia’s ICT sector is experiencing dynamic export growth, with substantial potential for further expansion and a growing presence in international markets.

Background

Inclusive Access to Markets is a EUR 5,162,000 initiative funded by the European Union (EU) and implemented by UNDP in partnership with the Estonian International Development Centre (ESTDEV). It aims to empower small and medium-sized enterprises (SMEs) in Georgia and foster their capabilities to enhance value chains and secure access to the EU and European markets.

Disclaimer

This Export Opportunities Analysis was conducted by Ernst & Young with the assistance of the EU and UNDP. Its contents are the sole responsibility of the research team and do not necessarily reflect the views of the EU and UNDP.