India will soon hold talks with Afghanistan on ways to boost bilateral trade and investment.
The first such meeting since January 2014 and the first during the tenure of the NDA Government led by Mr.Narendra Modi, is also aimed at mounting pressure on Islamabad to facilitate trouble-free transit of goods from India to Afghanistan through Pakistan (Wagah-Attari route), official sources told The Hindu.
This is to help in the development of Afghanistan which is a land-locked and Least Developed Country (LDC) as well as to boost trade and investment in South Asia through better regional connectivity, the sources said. They said it will also help India to improve trade ties with Central Asian nations.
In this regard, the ‘India-Afghanistan Joint Working Group on Trade, Commerce and Investment’ meeting will discuss ways to make use of the United Nations TIR (Transports Internationaux Routiers or International Road Transport) Convention to boost trade between India and Afghanistan through Pakistan.
The TIR Convention facilitates trade and international road transport by permitting customs-sealed vehicles and containers to transit nations without them being generally inspected at border crossings. The Union Cabinet chaired by Prime Minister Narendra Modi had earlier this month granted its nod for India’s accession to the TIR Convention. Pakistan and Afghanistan are also ‘contracting parties’ to the TIR Convention.
Thanks to the Afghanistan-Pakistan Transit Trade Agreement (APTTA), Afghanistan can use Pakistan’s territory for transit trade while Pakistan’s goods can move through Afghanistan to nations bordering Afghanistan. However, Islamabad has not agreed to allow using APTTA for goods to be transported from India to Afghanistan through Pakistan’s territory (via the Wagah-Attari route).
India is keen to join APTTA and Afghanistan has backed India’s readiness to be an APTTA member but Pakistan has so far rejected such a proposal. The sources said while India is likely to soon make renewed efforts to be an APTTA member, it will also look at how the UN TIR Convention can help send goods to Afghanistan through Pakistan.
While there have been informal proposals recommending India and Afghanistan joining the over $50 billion China-Pakistan Economic Corridor (CPEC), India has strategic concerns regarding the CPEC that would cover areas including Pakistan-occupied-Kashmir. CPEC is the so-called ‘flagship’ project of China’s One-Belt-One-Road (OBOR) initiative. The OBOR is aimed at developing infrastructure in more than 60 countries.
Transit route
In the absence of transit route through Pakistan, India depends on other countries, including Iran, to send goods to Afghanistan even though it increases time and costs for Indian exporters. India is also planning to strengthen air cargo links with Afghanistan as well as help expedite the development of Chabahar Port in Iran to bypass the Pakistan route to increase trade relations with Afghanistan, Iran and Central Asian countries. The India–Afghanistan trade and investment meeting will also consider more support from India to Afghanistan through Line of Credit, especially the Buyer’s Credit for project exports by Indian companies to Afghanistan.
India-Afghanistan goods trade had jumped nearly 22% to $834.5 million in 2015-16 with India’s exports to Afghanistan being $526.6 million and its imports from Afghanistan worth $307.9 million. However, it is still far below potential. During April-December 2016-17, the bilateral trade was to the tune of $590.1 million with India’s exports to Afghanistan being $377.2 million and imports from Afghanistan worth $212.9 million. India’s main export items to Afghanistan are textiles, pharmaceuticals, tobacco, iron & steel and electrical machinery, while its imports from Afghanistan are fruits and nuts, gums and resins, coffee, tea and spices.
