Afghanistan

Afghan political situation may impact trade in India, warns exporters

Post By : Basundhara Choudhury
Post Date : August 17, 2021
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The present political situation in Afghanistan, with Kabul falling into the hands of the Taliban, has given rise to mounting concerns among exporters who believe that bilateral trade between the two countries may face a direct repercussion from the situation.

Exporters are of the opinion that the present crisis enveloping the country of Afghanistan has shrouded the bilateral trade possibilities between the two countries, which may get impacted significantly in these uncertain times.

Issue of timely payments

Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai has advised domestic exporters to proceed with caution, 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,” Mr Sahai said on Monday.

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

Fall in bilateral trade

Former FIEO president and country’s leading exporter S K Saraf too said there will be a significant fall in the bilateral trade. However, India may not lose everything since Afghanistan relies on it for exports, he added.

With President Ashraf Ghani conceding defeat and leaving the country right before Kabul was taken over by Taliban, Afghanistan now faces a bleak and uncertain future.

Experts with similar views believe that there would be a complete standstill in the trade for a certain time, as the situation has spiralled 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,” said FIEO Vice-President Khalid Khan.

Chairman of Plastics Export Promotion Council of India (PLEXCONCIL), Arvind Goenka said now private players will have to deal through third countries to export to Afghanistan.

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