The militant organisation Taliban has halted import and export trade with India since it captured control of the crisis-ridden Afghanistan on Sunday, 15 August.
The block in the transfer of commodities is predicted to affect the Indian market, creating a deficit of certain goods. Here's all you need to know.
What is Imported, Exported Between India and Afghanistan?
India, which has long-running cordial trade relations with Afghanistan, exports sugar, tea, coffee, clothing, pharmaceuticals, transmission powers, cherry, watermelon, and medicinal herbs to the South Asian nation.
The imports to India from Afghanistan primarily comprise dry fruits. Eighty-five percent of the country's dry fruits come from Afghanistan. Afghan exports to India also include onions, dried raisin, gum, and spices such as hing and shah jeera.
About 38,000 tonnes of material is shipped in from Afghanistan each year, Vijay Bhuta, president of Dry Fruit Traders Association told The Indian Express (IE).
India's Trade Relations With Afghanistan
India is one of the biggest trade partners of Afghanistan, and has exported commodities worth $835 million to the nation in 2021, Director General of Indian Export Organisation (FIEO), Ajay Sahai, told the news agency ANI. India has also invested about $3 million in Afghanistan for several projects.
The FEIO chief added that he was confident that long-running trade relations between India and Afghanistan would be retained in the new regime.
“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.
Why Has the Trade Halted?
Sahai said that the imports from Afghanistan to India have stopped due to the Taliban's halting of cargo movement to Pakistan, from where the goods further travel to India.
“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," he was quoted as saying by ANI.
Transport routes crossing Dubai and the international north-south corridor are also used for trade between the two countries. These transit routes remain functional, the trade expert said.
The banking channels between the two nations have also collapsed since the Taliban took over, IE reported.
What Will Be the Fallout of the Trade Halt?
The prices of dry fruits in India, which are predominantly exported from Afghanistan, are expected to rise in the coming days.
“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 was quoted as saying by ANI.
India imports various dry fruits, such as walnut, pine nuts, apricot, and anjeer from Afghanistan. India may see a shortage of these commodities, especially apricot and anjeer, since Afghanistan is the only source for these.
President of Dry Fruits Association Vijay Bhuta told The Indian Express that the shipments from the Afghan sources are ready after a rich harvest of dry fruits, but cannot be transported.
Indian traders might also face losses due to the halt in exports. Eight percent of the sugar produced in India had been exported to Afghanistan last year, IE reported. With the freezing of banking channels, the export of such commodities is likely to suffer.
(With inputs from ANI and The Indian Express)
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