India halts trade with Afghanistan; Probably to begin again soon

“There is a temporary glitch in the trade as Afghanistan is witnessing a transition of power. But within a few days trade will restart,” said Rahil Shaikh, managing director of Mumbai-based MEIR Commodities, which exports sugar to Afghanistan.

India’s trade with Afghanistan has gone stale as the borders and banks have closed down right after the Taliban captured the capital city of Kabul, however, the industry officials said that the interruption was on a temporal basis and that the business will commence very soon and will be carried out on usual terms.

In India, New Delhi is one of the top suppliers of essential goods to Afghanistan, which primarily exports dry fruits. Shipments between the two countries witnessed a delay or were disrupted after Taliban insurgents started making military advances earlier this month, leading to the fall of the capital Kabul on Sunday, industry officials said.

Advertisement

“There is a temporary glitch in the trade as Afghanistan is witnessing a transition of power. But within a few days trade will restart,” said Rahil Shaikh, managing director of Mumbai-based MEIR Commodities, which exports sugar to Afghanistan.

India’s exports to Afghanistan touched $826 million in the same financial year that concluded on March 31, this trade comprised sugar, cereals, tea, spices, pharmaceutical and textile products. Interestingly, Afghanistan has accounted to be the second-biggest buyer of Indian sugar in the 2020/21 marketing as of Sept. 30, by purchasing a record high 624,000 tonnes, as per the data released by the All India Sugar Trade Association. Indian shipments arrive for Afghanistan by initially landing at Pakistan’s Karachi airport and is then migrated to Afghanistan through road.

Demand for sugar and other essential commodities is robust from Afghanistan and imports could rise once banks start operations, averred Tayyab Balagamwala, director at Karachi-based Seatrade Group.

“Taliban has slashed import taxes on many commodities. This will lead to more imports,” Balagamwala said.

India was importing and exporting commodities from Afghanistan even during the previous Taliban rule during 1996 to 2001, averred a Mumbai-based exporter, who declined to be named officially. The United States or European Union might impose sanctions on the Taliban but even those sanctions would exclude trade of essential commodities, he added.

The Federation of Indian Export Organisation informed the Reuters partner ANI on Thursday that the Taliban have stopped all imports and exports from India through transit routes of Pakistan. Taliban spokesperson Zabihullah Mujahid disagreed with this in a Tweet stating “The Islamic Emirate wants better diplomatic and trade relations with all countries.”