Taliban halting India- Afghanistan trade has sent ripples through Indian markets. The Taliban takeover is leading to a spike in prices of commodities especially dry fruits that are imported in India from Afghanistan. With trade halted, India is witnessing a demand and supply problem of dry fruits that are pushing the prices of these commodities.
The Taliban swept into Afghanistan’s capital Kabul for the second time in the last 25 years. This is the second time the Taliban toppled the country’s government. Taliban was removed from power in Afghanistan by US-led forces in 2001, they again captured the Afghan capital Kabul on August 15.
According to media reports, after taking over Kabul, the Taliban had stopped the movement of cargo through the transit routes of Pakistan, thereby stopping exports, imports from the country.
As per the Chambers of Trade and Industry, India is the largest market for Afghan products in the entire South Asia region. Ever since the Taliban halted the exports to India, the dry fruits prices are on an upward spiral . The buyers are witnessing a price rise of over Rs 200 per kg of almonds, figs, apricots and raisins, pistachio prices have also risen by Rs 250 per kg.
The Federation of Indian Export Organisation, a trade promotion body set up jointly by the Union Ministry of Commerce and the private trading sector told media agency ANI, “We keep a close watch on developments in Afghanistan. Imports from there come through the transit route of Pakistan. As of now, [the] Taliban have stopped movement of cargo to Pakistan, so virtually imports have been stopped.”
This supply problem comes at a time when the festival season in India is kicking off and the demand for dry fruits have risen sharply. From the wide array of available dry fruits, India imports dried raisin, walnut, almond, fig, pine nut, pistachios, dried apricot apart from fresh fruits such as pomegranate, apple, apricot, cherry, melon, and watermelon, medicinal herbs and Saffron from the south Asian country.
According to the Afghan Embassy website, the bilateral trade between India and Afghanistan stood at the $1.5 billion mark in 2019-2020. On the flip side, India’s exports to Afghanistan touched $1 billion and India’s imports from Afghanistan touched $530 million. The bilateral trade between India and Afghanistan was $1.4 billion in 2020-21. Exports from India were $826 million and imports were aggregated at $510 million in 2020-21. According to the statement put out by the Chambers of Trade and Industry, India and Afghanistan had a bilateral trade of about Rs 10,000 crore” in 2020-2021. It includes goods worth Rs 6,000 crore being exported from India to Afghanistan, and products worth Rs 3,800 crore being imported from Afghanistan to India.
India’s trade with Afghanistan has consistently improved over the last five years. Indian exports to Afghanistan witnessed a growth of over 89% between 2015-16 and 2019-20. Similarly, India’s imports also grew by 72% during the same period. In 2019-20, the export value increased by 39% and imports over 21% compared to 2018-19.
Traders and industry bodies are expecting the situation to improve with the passage of time. Giving a ray of hope for traders in India, Taliban spokesperson Zabihullah Mujahid also took to Twitter and said, “The Islamic Emirate wants better diplomatic and trade relations with all countries.”
Now, India will have to embrace the wait and watch approach to see how the trade situation between Afghanistan and India pans out in the future.