India-Afghanistan trade: Exports slump, imports surge

The recent talks between India’s Foreign Secretary Vikram Misri and Taliban Foreign Minister Amir Khan Muttaqi reportedly focused on expanding trade and leveraging Iran’s Chabahar port, which India has been developing to bypass Pakistan’s Karachi and Gwadar ports.

Conversely, imports from Afghanistan have seen a steady increase from $509.49 million to $510.93 million in 2021-22 and an all-time high of $642.29 million in 2023-24; the only exception being 2022-23 when imports saw a drop of $58.12 million to $452.81 million.

Before this, the last time India saw a trade deficit ($0.73 million) with Afghanistan was in 2000-01.

In 2023-24, the top items India imported from Afghanistan were mainly agricultural produce — figs, asafoetida, raisins, apples, garlic, saffron, fennel seeds, almonds, apricots, onions, pomegranates and walnuts.

Last year, India imported 29,123 tonnes of figs and almost the entire quantity came from Afghanistan. Similarly, Kabul was the biggest source of asafoetida, raisins and garlic.

Apple imports

In the last two years, Afghanistan has also emerged as a major apple supplier to India, surpassing traditional suppliers like Italy and the US. In the last fiscal, it was the third-biggest supplier of apples to India. The only two countries ahead of it were Iran and Turkey.

India’s exports to Afghanistan include mainly medicines, vaccines, soybean meal, and garments.

In the first seven months (April-October) of the current financial year, India’s trade deficit with Afghanistan has reached $125.27 million, with New Delhi’s exports valued at $196.03 million and imports at $321.30 million.

Dry fruits demand

Trucks loaded with Afghan dry fruits come from Kandahar to Wagah border via Pakistan. Traders attribute the jump in imports of Afghan dry fruit to two factors — rising demand post-Covid and ease of trade after Taliban’s takeover of Kabul.

Deepak Agrawal, Secretary, Nuts and Dry Fruits Council India (NDFCI), said: “Post-Covid, the dry fruit industry is growing at a rate of 15-20% annually. India imports a significant quantity of dry fruits, with no duty on those originating from Afghanistan. Contrary to perception, trade has actually become easier post-Taliban takeover.”

Saffron over poppy

Senior diplomat and former Ambassador Jayant Prasad said India’s export figures do not reflect the value of items sent as humanitarian aid to Afghanistan in recent years.

He said, “It is heartening to see that saffron is coming from Afghanistan. The Afghan government had encouraged the cultivation of saffron to replace the poppy cultivation in the country. It was started during 2008-09 and is still being continued. Their objective was to encourage saffron cultivation so that people would leave poppy cultivation.”

“India-Afghanistan trade reflects a blend of economic cooperation and strategic priorities, underlining India’s focus on regional stability. Despite Afghanistan’s political challenges and reliance on alternative routes like the Chabahar Port in Iran, trade continues, supported by India’s investments in projects like the Salma Dam and Afghan Parliament. Initiatives like the 2017 air freight corridor and duty waivers on Afghan imports have eased trade and strengthened goodwill through humanitarian aid,” said Ajay Srivastava, founder, Global Trade Research Initiative (GTRI ), a trade research body.

Srivastava said, “The Taliban’s return to power in 2021 disrupted trade, creating security and logistical hurdles, but trade is gradually resuming with cautious optimism. India plans to deepen ties by expanding Chabahar’s use, exploring new trade routes, and supporting Afghanistan’s economic recovery through development and capacity building. These efforts are part of India’s broader strategy to boost regional connectivity and counter China’s influence in Central Asia.”