India’s trade with Afghanistan has dried up as borders and banks have closed since the Taliban took over the country, Indian exporters have been adviced to remain cautious while dealing with their counterparts in the crisis-hit nation.
Such advice is being given so that there is no loss to any businessman of India, because ultimately the loss will be of the country itself. The Federation of Indian Export Organization has given this warning to India.
“There is a fear of default in payments due to banking-related issues and the overall impact on lives. We are advising exporters to take a credit cover for their shipments and in cases where there is time to meet the deadline, they should wait for things to stabilise,” a key functionary with trade body Federation of Indian Export Organisations told TOI.
India’s trade with Afghanistan was not large, with the country accounting for less than 0.3% of India’s exports and 0.1% of imports, with overall trade during the previous year pegged at $1.4 billion.
New Delhi is one of the leading suppliers of essential commodities to Afghanistan, which exports mainly dry fruits to India.
Shipments between the two countries were delayed or disrupted after Taliban insurgents started making military advances earlier this month, leading to the fall of the capital Kabul on Sunday, industry officials told Reuters.
Afghanistan has been the second-biggest buyer of Indian sugar in the 2020/21 marketing year ending on Sept. 30, purchasing a record 624,000 tonnes, according to the All India Sugar Trade Association.
Indian shipments for Afghanistan usually land at Pakistan’s Karachi port and from there are moved to Afghanistan through road.
The Federation of Indian Export Organisation told Reuters partner ANI on Thursday that the Taliban have stopped all imports and exports from India through transit routes of Pakistan.
For the moment, political instability and payments are a big concern, although the trade route — which was largely via air or via Dubai and the International North South Transport Corridor — technically remain open.
