Taliban Seals Pakistan’s Transit Routes, Cuts Trade With India

The Federation of Indian Export Organization (FIEO) last week said the Taliban have stopped all imports and exports with India. On Sunday, the Taliban seized control of Afghanistan’s capital Kabul after almost two decades.

Dr. Ajay Sahai, Director General of FIEO said “the Taliban have stopped the movement of cargo through the transit routes of Pakistan, thereby stopping exports, imports” to and from India.

After this shocking seal, prices of dry fruits in India might increase in the near future as the country imports about 85% of these commodities from Afghanistan, says FIEO.

As a matter of fact, India is not only one of the largest trading partners of Afghanistan today but also holds a large investment of about 400 projects in the country.

“India exports sugar, pharmaceuticals, apparel, tea, coffee, spices, and transmission towers to Afghanistan. The imports are related and largely dependent on dry fruits. India also imports a little gum and onions from the country.” says Sahai.

“The Taliban’s takeover of Afghanistan will impact bilateral trade relations with India”, said Praveen Khandelwal, secretary-general of the Confederation of All India Traders (CAIT).

As it is very clear that the prices of certain products may rise, CAIT representatives have advised domestic exporters to be warned and keep an eye on the developments.

CIAT’s top members urge the government to recognize the situation and help the traders in order to avoid any financial crisis. They stated a clear possibility of a complete standstill in trade with Afghanistan for a long duration as the situation could worsen in the war-torn country.

“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 said.

Pointing out that India has healthy trade relations with Afghanistan, Sahai said that exports to Afghanistan were worth $835 million in FY21 and the imports from the country were worth $509 million (approx). With regard to exports, Sahai said some goods were being exported through the international North-South Corridor and other goods were going through the Dubai route.

Foreign Minister Dr. S Jaishankar on August 18 said that the government is closely monitoring developments in Afghanistan, stating that the focus is now on ensuring security and the return of Indians who are still there.

The external affairs ministry on Tuesday said in a statement: “The Government of India is committed to the safe return of all Indian nationals and will institute flight arrangements once Kabul airport is open for commercial operations.”

A number of Indian nationals are still stuck in Afghanistan with officials saying that they will be repatriated only once commercial flights resume in Kabul airport.

However, after all this, trade with Dubai hasn’t been impacted.