5. The Indo-Afghan trade and investment “Transition to Prosperity” (P2P) issues have been organized sequentially over the past three years with support from USAID. In 2017, the first P2P was held in New Delhi, the second in Mumbai (2018) and again in New Delhi in 2019. The fairs allowed Afghan businessmen to showcase their products, conclude memoranda of understanding and agreements with Indian partners, and further strengthen economic ties between India and Afghanistan. Although the Taliban have announced their intention to continue trade and diplomatic relations with India, given the current situation, it is difficult to imagine how India can maintain the economic ties it established with Afghanistan after 2001. The recent political unrest in Afghanistan has unexpectedly affected neighbouring countries. This includes India, which has a significant volume of investment in the country and has established a flourishing trade relationship with Afghanistan in recent decades. Afghanistan occupies a crucial position in India`s network of trade and diplomatic relations, but the strong relations between these two nations have been threatened by the uprooting of the democratic government and the establishment of the Taliban regime in the war-ravaged country. An agreement has been signed between India and Afghanistan on the construction of the Shatoot dam in Kabul district, which will provide drinking water to 2 million Afghans. In addition, 100 community development projects worth $80 million are underway in Afghanistan under the Indo-Afghan agreement. On the other hand, Pakistan plays a key role in trade between India and Afghanistan.
Items exported from India to Afghanistan are shipped through the port of Karachi in Pakistan, where shipments are unloaded before being reloaded into trucks for delivery to the Af-Pak border points of Torkham and Shaman. Pakistan denied India land access to trade with Afghanistan, and this highway offered an alternative route to the interior of Afghanistan via the Iranian port of Chabahar. Hing traders told India Today: “About 60% of Indian Hing are from Afghanistan. Most traders have been operating in Afghanistan for more than three decades. The offer has been hit hard and it is difficult to look for new partners in such a short time. RECALLING the desire to promote mutually beneficial bilateral trade. Since 2001, when the United States ousted the Taliban, India`s trade with Afghanistan has amounted to more than $3 billion for Afghanistan`s reconstruction and development. The Afghan government has recently sought to source from India through government treaties. This has led to several agreements between Indian companies and the Afghan National Government Procurement Authority. Pharmaceuticals, medical technology, IT and technical services were among the priorities of this supply offensive. Over the past 20 years, India`s bilateral trade with Afghanistan has grown by leaps and bounds. Bilateral trade in 2019-2020 reached $1.5 billion with an increase in imports and exports.
Where a product benefiting from preferential treatment under this Agreement is imported into the territory of a Contracting Party in a manner or quantity which causes or threatens to cause serious injury to the importing Party, the importing Party may, after prior consultation, temporarily suspend the preferential treatment granted under the Agreement without discrimination, except in critical circumstances. Where a Party has taken measures in accordance with paragraph 1, it shall simultaneously inform the other Party and the Joint Committee established under Article XI. The Committee shall enter into consultations with the Party concerned and shall endeavour to reach a mutually acceptable remediation agreement. If consultations in the Committee fail to resolve the problem within sixty days, the Party concerned by such a measure shall have the right to withdraw preferential treatment. The Parties are free to apply their national legislation to restrict imports where prices are affected by unfair trading practices, including subsidies or dumping. The Parties undertake to notify, through the competent authorities, as soon as possible, the initiation of preliminary and definitive investigations and findings into such unfair trading practices affecting mutual trade. It is also a long-term relationship. In March 2003, India and Afghanistan concluded a preferential trade agreement. This agreement opened up a huge Indian market for Afghan products, mainly dried fruits, with significant tariff concessions ranging from 50 to 100%. FURTHER RECOGNIZING that the progressive elimination and elimination of barriers to bilateral trade through a bilateral preferential trade regime (hereinafter referred to as “the Agreement”) would contribute to the expansion of world trade, developments in Afghanistan, which began with the withdrawal of US forces and led to the Taliban seizure of power, surprised the world. How will the presence of the Taliban affect geopolitics as the rapidly growing momentum in Afghanistan sets in? What should New Delhi do? What will be the impact of trade relations? Agriculture is the main source of income for the majority of Afghans and accounts for a large part of the country`s exports.