India’s trade with Afghanistan has changed significantly since the Taliban took control in August 2021. In the fiscal year 2023-24, imports reached a high of $642.29 million, while exports fell to a low not seen in 16 years. This shift has created a surprising trade deficit, according to data from the Ministry of Commerce.
This change is important as India has been engaging more with the Taliban, who have shown interest in strengthening relations with New Delhi. They recognize India as a key player in the region.
Recent discussions between India’s Foreign Secretary, Vikram Misri, and Taliban Foreign Minister, Amir Khan Muttaqi, focused on increasing trade and utilizing Iran’s Chabahar port. This port offers an alternative route for India to trade without relying on Pakistan’s ports in Karachi and Gwadar.
Before the Taliban’s resurgence, India’s exports to Afghanistan were valued at $825.78 million in 2020-21, while imports stood at $509.49 million. However, exports plummeted in the following years: down to $554.47 million in 2021-22, $437.05 million in 2022-23, and $355.45 million in 2023-24. Meanwhile, imports increased steadily, except for a drop in 2022-23. The last trade deficit India faced with Afghanistan was in 2000-01.
In the current year, India’s top imports from Afghanistan include various agricultural products, such as figs, saffron, and apples. Notably, Afghanistan has become a significant supplier of apples, outpacing traditional exporters like Italy and the United States.
India’s exports mainly consist of medicines, vaccines, soybean meal, and clothing. In the first seven months of the financial year, India’s trade deficit with Afghanistan reached $125.27 million, with $196.03 million in exports and $321.30 million in imports.
India’s trade with Afghanistan reached its peak at $1.5 billion in 2019-20, just before the pandemic. It then dropped to $889 million in 2022-23 but rebounded to $997.74 million in 2023-24. Despite this, trade with Afghanistan represents only 0.09% of India’s overall trade, placing Afghanistan as the 82nd trading partner.
The demand for Afghan dry fruits, such as raisins and walnuts, has surged due to increased post-COVID consumption and improved trade processes since the Taliban’s takeover. Deepak Agrawal from the Nuts and Dry Fruits Council of India noted the industry is growing quickly and that trading with Afghanistan has become easier.
Furthermore, India’s humanitarian aid to Afghanistan hasn’t always reflected in export statistics. Former diplomat Jayant Prasad mentioned that India has now reopened visas for Afghan businessmen, creating opportunities for further trade growth.
India’s trade with Afghanistan exhibits a blend of economic collaboration and strategic interests. Even with Afghanistan’s ongoing political issues and the need for different trade routes, India continues to invest in projects such as the Salma Dam and the Afghan Parliament. Programs like the air freight corridor and duty waivers on Afghan imports have promoted trade and goodwill.
Despite the hurdles posed by the Taliban’s return, trade is cautiously recovering. India aims to enhance ties by boosting the use of Chabahar port and supporting Afghanistan’s economic development. These strategies are part of a broader initiative to increase regional connectivity and balance China’s influence in Central Asia.
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India-Afghanistan trade, India-Afghanistan relations, India-Afghanistan ties, Taliban takeover, Exports slump, imports surge, Indian express news, current affairs
