Afghanistan situation to impact trade with India, says exporters

India has bilateral trade with Afghanistan. It imports dry fruits, fresh fruits and medicinal herbs while outbound shipments to that country include tea, coffee, pepper and cotton.

Afghanistan situation to impact trade with India-Exporters

With Kabul falling into the hands of the Taliban, bilateral trade between Afghanistan and India will get impacted significantly in these uncertain times, according to exporters. Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said domestic exporters should follow caution looking into the political development in Afghanistan, particularly with regard to payments, for which adequate credit insurance may be availed by them.

“The trade will be impacted. It would reduce due to the growing uncertainty in Afghanistan,” he said.

Former FIEO president and country’s leading exporter S K Saraf too said there will be a significant fall in the bilateral trade. “We may not lose all because they need our products,” Saraf said.

Afghanistan stares at an uncertain future as President Ashraf Ghani left the country just before Kabul fell into the hands of the Taliban on 15th August.

Sharing similar views, FIEO Vice-President Khalid Khan stated there would be a complete standstill in the trade for a certain time, as the situation is out of control in Afghanistan. “It is a landlocked country and the air route is the main medium of exports and that has been disrupted. Trade will resume only after the uncertainty will get down,” Khan said.

Biswajit Dhar, a professor of economics at Jawaharlal Nehru University said India’s aid to Afghanistan was creating a market for domestic products and due to the current situation, “all this will stop”.

Rajiv Malhotra, proprietor of Sai International and an exporter to Afghanistan said exports from India would completely stop as now there will be an issue of timely payment. “We are watching the situation to decide on our next move,” Malhotra said.

The bilateral trade stood at US$ 1.4 billion in 2020-21 as against US$ 1.52 billion in 2019-20. Exports from India were US$ 826 million and imports were aggregated at US$ 510 million in 2020-21.

Afghan exports to India include dried raisin, walnut, almond, fig, pine nut, pistachios, dried apricot and fresh fruits such as apricot, cherry, watermelon, and medicinal herbs. India’s outbound shipments to that country include tea, coffee, pepper and cotton.