Im­prov­ing con­nec­tiv­ity, boost­ing trade

The fo­cus of Afghan regime is to im­prove con­nec­tiv­ity and trade with neigh­bours in Cen­tral Asia and Europe.

Maritime Gateway - - Contents - By Omer Ahmed Sid­diqui

The fo­cus of Afghan regime is to im­prove con­nec­tiv­ity and trade with neigh­bours in Cen­tral Asia and Europe.

Hav­ing gone through years of war and tur­moil, Afghanistan is now fo­cus­ing on boost­ing trade and im­prov­ing lo­gis­tics. A re­cent step in this di­rec­tion was the launch of air cor­ri­dor be­tween In­dia and Afghanistan last year. The land­locked coun­try used to route its bilateral trade with In­dia through Pak­istan, but fre­quent clo­sure of bor­ders of­ten created ob­sta­cles in trade tran­sit.

To en­sure un­in­ter­rupted trade flow Afghan Pres­i­dent, Mo­ham­mad Ashraf Ghani last year mooted the idea of air cor­ri­dor with Prime Min­is­ter Naren­dra Modi, which was later penned into an agree­ment. Af­ter nearly one year, the first In­dia-bound flight car­ried 60 tonnes of medic­i­nal plants, worth $11 mil­lion, from Kabul, while the sec­ond flight from Kan­da­har brought 40 tonnes of fruits and veg­eta­bles. Sub­se­quently, a flight from Delhi to Kabul trans­ported 100 tonnes of goods, mainly phar­ma­ceu­ti­cals and med­i­cal equip­ment. Bilateral trade be­tween Afghan and In­dia was $300 mil­lion which in­creased to $700 mil­lion an­nu­ally and is fore­cast to reach $10 bil­lion in the years to come. Agri prod­ucts and car­pet in­dus­try are seen as the ma­jor ben­e­fi­cia­ries of the air cor­ri­dor. Ac­cord­ing to the Afghan Cham­ber of Com­merce and In­dus­tries (ACCI) the cost of trans­port­ing a kilo­gram of veg­eta­bles and fresh fruit from Kabul and Kan­da­har to In­dian mar­kets will be about 20 cents per kg, and the cost of a kilo­gram of goods from In­dia to Afghanistan will be about 40 cents.

The Afghan gov­ern­ment would bear the cost of air freight on spe­cially char­tered cargo flights, al­low­ing the ex­porters to pay on the truck­ing fare over­land from Kabul and Kan­da­har to Am­rit­sar and Delhi.

The cargo move­ment has re­cently run into a rough patch with fruit ex­porters com­plain­ing pro­ce­dural de­lays, par­tic­u­larly short­age of cargo planes is caus­ing them ma­jor losses. For in­stance, on July 20 the flight char­tered by Afghanistan’s na­tional car­rier, Ari­ana air­lines failed to ar­rive on time, and the per­ish­able cargo com­pris­ing apri­cot and mel­ons were not moved to cold stor­age, caus­ing tonnes of fruits to rot at the Kabul Air­port. Ac­cord­ing to ACCI re­ports only four cargo flights have flown be­tween Afghanistan and In­dia un­der the scheme, car­ry­ing about 160 tonne in all. Is­sues on the Afghan side in­clude lack of cargo screen­ing ma­chines at air­ports and in­ad­e­quate cold stor­age fa­cil­i­ties, while In­dian traders worry about clear­ing the per­ish­able goods quickly through cus­toms as the process is yet to be stream­lined. To im­prove flight fre­quency, Afghan gov­ern­ment has roped in a pri­vate air­line Kam Air.

Hook­ing to trans-asia trade route

Afghanistan is also im­prov­ing its con­nec­tiv­ity with Iran and sub­se­quently will be part of the East-west rail­way con­nect­ing China to Europe. Such a rail­way would al­low Eastern coun­tries to cir­cum­vent the Suez Canal and other crowded sea lanes, rev­o­lu­tion­is­ing trans-asian trade and mak­ing Iran a key hub for the global trans­fer of goods. Iran has re­cently com­pleted the first 30 kilo­me­tres of the Khaf-herat rail­road con­nect­ing to Afghanistan. The rail link is ex­pected to boost a ro­bust $2.8 bil­lion trade re­la­tion­ship be­tween the two coun­tries by 5 mil­lion tonnes of cargo an­nu­ally. It will also con­nect Iran and Afghanistan to In­dia through rail. The rail pro­ject will al­low Afghanistan, In­dia and Pak­istan to gain di­rect ac­cess to Cen­tral Asian, Euro­pean and Rus­sian mar­kets.

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