Indian Exporters Are Worried About Their Pending Payments After Taliban Takeover Afghanistan

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With Afghanistan being taken over by militant group Taliban and the on-going unrest, Indian exporters to the country are apprehensive that their payments could get stuck due to possible banking and other restrictions imposed by the new regime and trade may also take a hit in the uncertain environment.

India’s exports to Afghanistan in 2020-21 was around $825.78 million while imports were valued at $509 million. Top exports from India include sugar, tobacco, pharmaceuticals and textiles and apparels. India’s imports from Afghanistan include fruits and nuts, lac, gums & resins and coffee, tea & spices.

Some officials, however, are of the view that the negative impact on trade may be a temporary phenomenon caused by the disruption in transportation and economic activities due to the regime change. As things settle down, the trading situation may move towards normalcy, they say.

Given the volatile situation, exporters are keeping a wary eye on the developments and are hoping that the new power in Kabul will allow trade sooner rather than later, Ajay Sahai, Director General of Federation of Indian Export Organisation (FIEO) said. FIEO has said that trade stopped immediately after the Taliban took over Kabul.

There is certainly a lot of uncertainty brought about by Taliban taking over the country and in uncertain times trade does go down,” Sahai added.

On the other hand, a sharp uptick in prices of dry fruits is expected as the only source for particular fruits has now shut down. By volume, almost 97 percent of figs imported to India come from Afghanistan, as do 96 percent of raisins. The wholesale prices of these items have risen in major markets in many cities after the latest violence broke out, traders said.

Afghanistan is a landlocked nation with no direct access to the sea. On the other hand, given Afghanistan’s acrimonious diplomatic relations with Pakistan, Islamabad has for long restricted all trade with India across its soil.

As a result, most merchandise is brought in and out of Afghanistan through the 7200-km long International North-South Transport Corridor (INSTC), which passes through neighboring Iran. It is then shipped from Chabahar port, Iran to western ports such as Mumbai. But that route is now closed, reported MoneyControl.

Also, Read This: Taliban Stops Trade With India, Dry Fruit Prices May Hike

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