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Too Soon To Predict Indo-Afghan Trade Future: FIEO DG

In the past few days, several reports have emerged about how import-export trade in India, the largest beneficiary of Afghanistan's exports, is at a halt which is taking a toll on the people in the business due to their stuck payments.

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The recent takeover of Afghanistan by the Taliban forces has put the entire world upside down, in many terms. From the emerging humanitarian crisis to the economy, trade to import-export business, everything is at stake, especially for South Asian countries including India.

In the past few days, several reports have emerged about how import-export trade in India, the largest beneficiary of Afghanistan's exports, is at a halt which is taking a toll on the people in the business due to their stuck payments.

Ajay Sahai, Director General and CEO, Federation of Indian Export Organisation (FIEO) said, “The recent political development in Afghanistan has caused uncertainty in trade and businesses, and we are watching the development closely. It has impacted the flow of trade between the two countries (India and Afghanistan). It is too early to predict what will happen in the future. However, we feel that over a period of time the stability and predictability in trade will be established.”

As the intense crisis unfolds in Afghanistan with each passing day, there are a lot of exporters who are worried about the stuck payment and current situation. “The situation is quite fluid and thus waiting and watching is the best policy. We have advised exporters to go for credit cover to tide over the payment problem. The exporters who still have delivery time left or otherwise also are postponing exports,” Sahai added.

The major Afghanistan exports to India consist of cereals, sugar, pharmaceuticals, apparel, textiles, tea, coffee, spices, tobacco, and machinery including transmission towers. Meanwhile, Indian exports to Afghanistan consist of coffee, tea, cotton, toys, footwear, and several other consumable items.

Talking about the uncertainty among exporters, whether they should continue the operation in Afghanistan or not. Sahai said, “Yes, their concerns are genuine but they should not hurry their decision as all aspects need to be evaluated to arrive at a well thought conclusion: political, economic, logistics, banking, currency movement, etc.”

Meanwhile, commercial traffic across Pakistan and Afghanistan's border at the Spin Boldak/Chaman crossing was seen, on Thursday, which further depended on the worries of Indian traders.

However, to clear the confusion of any future trade with the country, Sahai said, “Let us not rush to a decision . We are hopeful that the situation will get clear within the next few days and whatever instruction is provided by our Government will be followed by our exporters/importers.”

Few have predicted that the halt on Indian trade by the Taliban can affect the Indian economy to a certain extent and the whole situation is a bad sign for the Indian economy. Sahai said, “The Indian economy is primarily domestic driven. Moreover, Afghanistan’s share in India’s exports is miniscule and thus I would say that economically, it does not affect us.”


Tags assigned to this article:
india trade import export taliban afghanistan