Economy

Kabul inaugurates aerial trade corridor with New Delhi

By Shadi Khan Saif

KABUL, Afghanistan 

 In a desperate move to end reliance on Pakistan for trade, President Ashraf Ghani on Monday inaugurated an aerial trade corridor between Kabul and New Delhi.

The first freight flight took off from the capital Kabul on Monday afternoon, carrying 60 tons of medical plants worth $​11 ​million.

Afghanistan is eyeing a 60 percent surge in exports to India through this air route, after frequent border closures by Pakistan has affected its trade drastically in the last two years.

The next flight will take off in a week from eastern province of Kandahar, with an estimated 40 tons of fresh and dried fruits. Similar flights are scheduled from India to Afghanistan.

The idea, conceived during Ghani’s trip to India for the Heart of Asia Istanbul Process summit last year, would link Kabul and Kandahar to the Indian capital, New Delhi.

Ghani was accompanied by Indian Ambassador Manpreet Vohra among other officials at the Hamid Karzai International Airport, as they saw the state-owned Ariana Airlines fly for New Delhi.

“Those who create challenge for us should know that we turn challenge into opportunity,” Ghani said while urging neighboring countries to come together for economic connectivity and elimination of poverty in the region.

Vohra said he hopes bilateral trade would reach the billion dollar mark in the next three years.

Indian External Affairs Ministry spokesman Gopal Baglay said the freight service is expected to boost trade between both the countries. “A warm reception will be accorded to the first flight in New Delhi, which will bring Afghan products to New Delhi, as they are quite popular in India,” said Baglay in a press statement.

 70 percent trade decrease

Trade volume between Afghanistan and Pakistan has fallen drastically in the past two years due to frequent border closures, and a prevailing political rift amid allegations of cross-border terrorism.

According to Siyam Pasarly, spokesman for the Afghanistan Chamber of Commerce and Industries (ACCI), the drop in bilateral trade is more than 70 percent in comparison with the past few years.

“Our trade with Pakistan has fallen from $3 billion per year a couple of years ago to around $500 million this year. But trade with other neighbors such as Iran, the Central Asian states, Turkey and India has increased,” Pasarly told Anadolu Agency.

According to ACCI figures, Afghan-Iran trade volume has increased 25 percent, from $1.5 billion to $2 billion per year.

Afghanistan’s exports to India amounted to $79.81 million, with imports at $151.94 million last year, according to ACCI. They are expected to rise when Chabahar Port in Iran, which promises an alternative India-Afghanistan trade route, becomes operational in 2018.

ACCI officials say the cost of transporting a kilogram of vegetables and fresh fruit, from Kabul and Kandahar to Indian markets, will be about 20 cents per kilogram, and the cost of a kilogram of goods from India to Afghanistan will be about 40 cents.

The Pakistan embassy in Kabul said in a statement on Monday Pakistan intends to open a transit route for Afghan exports.

Air route expensive 

Ghulam Ali, former president of Pakistan’s Federal Chamber of Commerce and Industries, has expressed fears the volume of trade with Afghanistan would further reduce if the two countries failed to address bilateral issues.

He said the Afghanistan-India air corridor is an expensive deal compared to the land route via Pakistan.

Afghanistan heavily relies on Pakistan, the country’s largest trade partner, but frequent political and security issues between the two have severely hampered prospects for growth in bilateral trade among other areas.

The two neighbors are signatory to the Afghanistan–Pakistan Transit Trade Agreement (APTTA) signed in 2010 which calls for greater facilitation in the movement of goods between the two countries, but Islamabad has declined Kabul’s repeated calls to include India as well.

Currently, Afghan trucks are only allowed to drop their supplies at the Indian border and return empty without bringing back Indian goods, a condition lamented by both New Delhi and Kabul.

*Islamuddin Sajid from Pakistan and Shuriah Niazi from India contributed to this report.


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