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Pakistan’s export suffers massive decline with Afghanistan; India wins big time

      02/05/2019

Pakistan ’s captive market has massively shifted to Iran and India mainly on account of the frequent closures of trade borders between Pakistan and Afghanistan and intensifying diplomatic tensions.

According to the latest trade data of Islamic Republic of Iran Customs Administration, Iran’s exports to Afghanistan have increased to $2.8 billion and out of which in first ten months the financial year of Iran the exports to Afghanistan have climbed to $2 billion as of June 20, 2019. However, “Iranian exports to Afghanistan in 2011 stood at $1.88 billion which now has risen to $2.88 billion with the increment of $1 billion in exports”, says UN COMTRADE database on international trade.

Presently Iran holds 22% share ($2.5 billion) of Afghanistan’s $11.5 billion consumer market. Pakistan’s export which once in 2010-11 stood at $2.6 billion has declined to $1.4 billion revealing the bitter fact that Iran has taken away the Pakistan captive market to a large extent. The official said that closure of trade borders between Pakistan and Afghanistan in the wake of terror activities in Pakistan has provided the opportunity to Iran to make inroads in Afghanistan market.

At Indo-Afghanistan trade, the official said, “In 2010, the exports from India to Afghanistan stood at just $115.6 million and the trade between the two states is also growing up which currently stands at $1 billion out of which India’s exports to Afghanistan stand at $873 million showing that the export from India has increased by 65%.

However, both the countries have shown the commitment to grow the trade between them up to $2 billion by 2020. Currently, India is trading with Afghanistan through Chabahar port in Iran and two air cargo routes linking New Delhi and Mumbai to Kabul”.

The senior official at commerce ministry said: “Pakistan’s exports to Afghanistan came across a mammoth decline due to the decrease in aggregate demand as a result of the withdrawal of NATO forces from Afghanistan, increasing trust deficit, worsening law and order situation, frequent closures of the Pak-Afghan border and diversion of Afghan trade to Iran”.

Afghanistan which is a landlocked country has diversified its import regime and started importing items from other neighbouring countries reducing the import reliance on Pakistan because of the rise in trust deficit.

Recently, Prime Minister Imran Khan has directed the relevant authorities to make necessary arrangements for keeping the Torkham border crossing between Pakistan and Afghanistan operational to boost bilateral trade ties between the two countries.

According to the details, Pakistan exported the items valuing $1.271 billion to Afghanistan in 2016-17 as compared to exports of worth $2.6 billion in 2011-12. However, the bilateral trade was in 2011-12 at $2.6 billion which has now compressed to just $1.4 billion.

Interestingly, the imports from Afghanistan have grown up to $414 million which stood at $199 million in 2011-12 whereas Pakistan exports have dwindled by 41.57%.