Taliban stops trade with India, blocks key Pak-Afghan channels

The Taliban, which took over Afghanistan capital Kabul on Sunday, has stopped all exports and imports with India and blocked two key trade routes through the Pakistan-Afghanistan border, the Federation of Indian Export Organisation (FIEO) has said.

“We keep a close watch on developments in Afghanistan. Imports from there come through the transit route of Pakistan. As of now, the Taliban has stopped the movement of cargo to Pakistan, so virtually imports have stopped,” FIEO director general Dr Ajay Sahai told the media.

India is a key investor in Afghanistan and boasts of investments worth $3 billion in the country.

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“In fact, we are one of the largest partners of Afghanistan and our exports to Afghanistan are worth around $835 million for 2021. We imported goods worth around $510 Million. But besides the trade, we have a sizeable investment in Afghanistan. We have invested around $3 billion in Afghanistan and there are 400-odd projects in Afghanistan some of which are currently going on,” Sahai said.

He, however, said that export terminals to Afghanistan both from the international north-south transport corridor and Dubai are working.

India’s key imports from Kabul are fruit, nuts and vegetable extracts while it flies out sugar, sugar confectionery, tea, coffee, spices, toys, footwear, cotton, pharmaceutical products, and apparel to the landlocked country. Indian import of dry fruits from Afghanistan include dried raisins, walnuts, almonds, figs, pine nuts, pistachios, dried apricot apart from fresh apricots, cherry and watermelon.

“Imports are related and largely dependent on dry fruits. We also import a little gum and onions from them,” Sahai said.

He expressed concern that the price of dry fruits may go up in the coming days as India imports 85 per cent of its dry fruits from Afghanistan.

“I will say that may not directly impact the prices but the very fact that one of the sources of import no longer exists, speculation of increase in prices is not ruled out,” Sahai said.

He, however, said the industry is watching the situation in Afghanistan and is hopeful that trade will resume soon.

“I am pretty sure over a period of time Afghanistan will also realise that economic development is the only way to move forward and they will continue with that kind of trade. I think the new regime will like to have political legitimacy and for that India’s role will become important for them also,” he said.

Earlier on Sunday, Praveen Khandelwal, the general secretary of the Confederation of All India Traders (CAIT) had hinted that the Taliban takeover of Afghanistan will affect India’s trade ties with the South Asian country.

According to CAIT, the trade between the two countries was valued at $1.4 billion in 2020-21 against $1.52 billion the year before. While exports from India is worth $826-$835 million the imports were valued at $510 million on 2020-21.

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CAIT had predicted that while the import and export of commodities may be blocked due to the change in regime, payments are likely to remain unpaid for an uncertain period of time.

“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 eases. Private players will have to deal through third countries to export to Afghanistan, but it all depends on how the situation evolves,” CAIT had said urging the government to come to the aid of traders who will be hit by standstill in trade.