What is the issue?
- There is a declining trend of bilateral trade between Afghan and Pakistan.
- India needs to use this opportunity to expand its trade with Afghanistan.
What are the status of trade between Afghan-Pak?
- Afghanistan shares 2430km long border with Pakistan, and there are many armed disputes in this borders.
- Over the last 15 years, Pakistan has closed its border on multiple instances with Afghanistan.
- The bilateral trade peaked to $3 billion in 2011, the estimates for the current year are less than $1 billion between the two countries due to recent border conflicts.
- The main item of trade between the two nations is Wheat,2017 faced four border blockages by Pakistan, and steep decline of about 26 per cent in its exports to Afghanistan.
- Pakistan currently has stocked 9.7 million tonnes of wheat but isn’t able to export it for lack of a clear policy.
- Afghan also lost interest in pushing forward any trade related agreements with Pakistan, due to the alternative trade route via Iran.
How Pakistan is affected due to Afghanistan’s move?
- A decline of bilateral trade by 70 per cent over a decade between Pakistan and Afghanistan has been comfortably filled in by other neighbours in central and south Asia.
- In 2006, Afghanistan imported more than 50 per cent of its wheat and flour requirements from Pakistan, but that lead has now been taken by Kazakhstan.
- Estimates show that more than 800 flour mills have been closed in Pakistan due to a decline in exports to Afghanistan, especially in the Khyber-Pakhtunkwa region.
- Given storage infrastructure limitations, most of this wheat is lying in open storage.
What are existing relations between India and Afghan?
- India’s aid to Afghanistan in building roads and railways, has earned India substantial goodwill in that nation.
- India has also invested in training its civil servants and security forces.
- India is Afghanistan’s top export destination in 2016, $220 million of Afghanistan’s $483 million in total trade went to India, which accounted for 46 per cent of Afghan exports.
- India is a minor player in exports to Afghanistan, having accounted for just 2 per cent of Afghanistan’s total imports in 2016.
How India makes use of this situation?
- India sent its first shipment of wheat in October 2017, through the strategically located Chabahar port in Iran).
- This shipment is first in a series of six shipments totalling 1.1 million tonnes of wheat, on a grant basis.
- Thus the border blockades and other myopic measures by Pakistan along the Afghan-Pak give India a unique opportunity to capitalise on growing exports from current levels and embarking upon a new era of trade diplomacy with Afghanistan.
Source: Business Line
