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Chabahar Port Project – a melange of significant initiatives of Afghanistan-India’s connectivity and trade

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Chabahar Port Project

The Chabahar Port project is the best example of a relevant institutional structure aimed at ensuring efficiency in connectivity for promoting trade across the world, writes Neelapu Shanti for Elets News Network.

Afghanistan’s friendship with India is strong and true and stressed out its neighbourhood policy on the top priority to strengthen its relations. Afghanistan’s growth is linked with the prosperity and affluence with other countries in the world especially India.  It is against this background that Afghanistan and India’s relationship is moving from strength to strength.

The Chabahar Port project is the best example of a relevant institutional structure aimed at ensuring efficiency in connectivity for promoting trade across the world. Chabahar Port was conceptualised as a means to provide necessary support in bringing in the required institutional rigour to the countries and facilitate development through smooth connectivity.

On 4th September 2019, Afghanistan, for the first time, exported 20 tons of fresh grapes to India via Chabahar port, the first of its kind since trade route has been launched. The Ministry of Commerce and Industry said that Afghanistan has sent a total of 700 tons of goods to India through Chabahar, which included legume, precious stones, and dry fruits. Afghanistan has exported carpets, dry fruits, cotton, talc, stones, and other items weighing 570 tonnes.

The Chabahar Port Project is the best example of a relevant institutional structure aimed at ensuring efficiency in connectivity for promoting trade across the world. Chabahar Port was conceptualised as a means to provide necessary support in bringing in the required institutional rigour to the countries and facilitate development through smooth connectivity

Afghanistan-India Trade opportunities through Chabahar

Chabahar Port project under the framework, of International North-South Transport Corridor (INSTC) between India and Iran and the Trilateral Land Transit-and-Trade Corridor deal between India, Afghanistan and Iran signed on May 23, 2016 has created transformational reforms for Afghanistan’s connectivity with India which is an emerging fastest growing economy in the world. Chabahar Port agreement is a paramount endeavour for Afghanistan towards becoming the roundabout of connectivity and is determined to lift its position in the strongest synchronised global economy. Since the operationalisation of the Chabahar connectivity in February this year, Afghanistan has exported carpets, dry fruits, cotton, talc, stones and other items weighing 570 tonnes.

On September 4, 2019, Afghanistan, for the first time exported 20 tons of fresh grapes to India via Chabahar port, the first of its kind since trade route has been launched.

“Over the last three weeks, 100 tons and since its establishment 700 tons of domestic products have been exported through this port,”  said, Tahir Qadiry, Charge’ d’Affaires of Afghanistan Embassy to India.  The Ministry of Industry and Commerce, said that Afghanistan has sent a total of 700 tons of goods to India through Chabahar which included legume, precious stones, and dry fruits.

India has sent a consignment of 1.1 lakh tonnes of wheat, pulses and other assistance in over 4,800 containers to Afghanistan so far. The volume of trade between Afghanistan and India is increasing annually which is more than 1.1 billion USD at present. The trade volume has been increasing from 680 million USD in 2013-14 and 2014-15 to 800 million USD in 2017 and projected to cross 20 billion USD by 2020 using the Chabahar route and also the air corridors.

There are immense investment opportunities in Afghanistan, particularly the emerging sectors of mining, infrastructure, telecommunications, agro-based and small-scale industries, health, pharmaceuticals, education and IT.

The Preferential Trade agreement of Afghanistan India in 2003 is making Afghanistan one of the top trade partners of India. Under the Preferential Trade agreement framework India allowed substantial duty concessions, ranging from 50 to 100 percent, to certain category (38 times) of Afghan dry fruits.

Afghanistan, in turn, has allowed reciprocal concessions to Indian products, including tea, sugar, cement and pharmaceuticals. In 2011 India has removed basic custom duties for all South Asian Association for Regional Cooperation (SAARC) Least Developed Countries which gave all products of Afghanistan (except alcohol and tobacco) duty-free access to the Indian market.  The prominent Indian companies doing businesses in Afghanistan include KEC, Phoenix, AIPL, WAPCOS, ANGELIQUE International, APTECH, Gammon India, KPTL, ANAAR Group and Spice Jet.

Also Read: How Exhibitions are Broadening Afghanistan’s Business Horizon

India’s Union Budget in June this year slashed the amount allocated for the Chabahar port from Rs 150 crore to Rs 45 crore. With this announcement it may shoot down the call of traders and investors of Afghanistan and India concerning stability and opportunities but this concern has no negative implications.  India is committed in all fronts investing in Chabahar Port Project; it is just a strategic and logistical decision which is emphasised by the leadership of India.

The aspiration and vision of Afghanistan will only come true when all countries share a common vision for an open and rule-based region and with a common interest in the maintenance of peace, stability and inclusive prosperity. It is important to join all the countries in the effort to protect the freedom of navigation and unimpeded trade and should not be divided by self-interest. Afghanistan has the potential to create a new pole of development and an important engine for peace, prosperity and integration both in South Asia and the world at large.

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