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 envrionment.
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.
“The Taliban would not want the Afghan economy to collapse. They would want normal trade to continue so that the economy continues to generate resources which in turn are vital for the running of the government,” an official tracking the matter told
An apprehensive lot
Exporters to Afghanistan, nonetheless, are apprehensive about their payments getting stuck and businesses getting affected due to future restrictions.
“We are getting a large number of queries from exporters who are shipping various goods to Afghanistan. They want to know whether they should continue operating in the country and also if it is advisable to scale down operations.
There is certainly a lot of uncertainty brought about by Taliban taking over the country and in uncertain times trade does go down,” said Federation of Indian Export Organisation (FIEO) Director General Ajay Sahai.
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.
“Exports of food and other important commodities like pharmaceuticals and clothing would surely find inroads into the country once things get settled. Hopefully this will happen soon and peacefully,” a Delhi-based exporter of food items said.
FIEO is advising all exporters to Afghanistan to try and cover their payment risks through credit insurance. “The fear is that while exports may reach their destination, there may be problems with the payments as the new regime may impose banking or some other payment restrictions. We are not advising against continued exports. But exporters have to certainly cover against such risks,” Sahai said.