Global Trade Impact of Taliban Takeover Afghanistan – Initial Assessment
20 August 2021

The collapse of the Afghani
government and the speed at which Taliban forces have taken over the country
poses many questions, not least about the country’s economic future and role as
a trade route. Global trade is expected to get impacted, particularly India’s
trade with Afghanistan as Taliban has stopped movement of cargo through
Pakistan. India has long-standing relations with Afghanistan, especially in
trade and a large investment into the country. Let’s have an early assessment
of global trade impact of Taliban takeover Afghanistan.
Who
are the Taliban?
The Taliban emerged in the
civil war that followed the withdrawal of Soviet troops in 1989, predominantly
in the south-west and the Pakistan border areas.
Afghanistan
Trade with India, Pakistan, China & Iran
As per Afghanistan trade data, Afghanistan’s largest trading partners are
India, Iran, China and Pakistan. Before assessing how Afghanistan trade with
other countries will get impacted from Taliban takeover Afghanistan; here is a
look at value in percentile of Afghanistan’s top import sources and export
destinations reported in 2019.
Import Partner |
Value USD % |
Export Partner |
Value USD % |
Iran |
18.4 |
India |
47.5 |
China |
17.1 |
Pakistan |
34.5 |
Pakistan |
15.6 |
China |
3.6 |
India |
6.0 |
Iran |
1.7 |
Global
Trade Impact of Taliban Takeover Afghanistan
As the Taliban takeover
control over Afghanistan after two decades, the trade between India and
Afghanistan has been severely affected. According to the Federation of Indian Export Organization (FIEO), the Taliban has
stopped the movement of cargo through routes of Pakistan thereby hampering and
stopping exports & imports between the countries. India is one of the
largest trading partners of Afghanistan. The latest India export data shows India
shipped goods worth USD 538 million to Afghanistan during Jan-Jun 2021.
Presently, India exports
sugar, apparel, pharmaceuticals, coffee, tea, spices and transmission towers to
Afghanistan. Dry fruits are majorly imported by India from Afghanistan. As per India import data, India imported products valued USD 226 million from Afghanistan during
Jan-Jun 2021.
Prices of dry fruits in
India are likely to rise after the Taliban stopped all import & export of
goods with India as 64% of India’s dry
fruits came from Afghanistan during Jan-Jun 2021. India imported Afghani dry
fruits worth USD 5 million in first six months of 2021. Other major imports
from Afghanistan include cherry, watermelon and medicinal herbs. Bilateral
trade between India and Afghanistan stood at USD 1.4 billion in 2020-21 as
against USD 1.52 billion in 2019-20.
The Afghan economy has been
depending on international aid with a limited private sector. Trade experts
predict the current situation in Afghanistan will affect international trade.
Afghanistan is at the centre
of a number of trade routes linking Europe and countries in the Middle East and
Far East including China’s Belt and Road Initiative (BRI). China is the
second-largest import partner and third-largest export partner of Afghanistan. China’s major imports from Afghanistan
are nuts, animal hair, dried fruits, vegetable products and tropical fruits.
China’s
top exports to Afghanistan are rubber, broadcasting
equipment and yarn woven fabric. Certainly, trade between China and Afghanistan
will also be affected by the current situation into the country.
Drug
Trade
The Taliban controlling over
Afghanistan could fuel a surge in the export of heroin and other drugs as it
takes control of trade routes.
Port
Problems
Landlocked Afghanistan is
reliant on ports in other countries for exports and imports. India’s investment
in Chabahar Port in Iran could be dead money from the effect of Taliban’s
control over Afghanistan. Chabahar allow a route to Afghanistan that
sidestepped Pakistan. However, the development has moved slowly and the United
States has backed alternative connectivity projects with Pakistan and
Uzbekistan. Pakistan is also developing its own Chinese-backed port at Gwadar,
although progress has been troubled.
Afghanistan
Trade with India, Iran, China and Pakistan – Past Scenario
Afghanistan’s imports from
Iran, China and India increased from 2015 to 2019, while declined from Pakistan
slightly in the said period. As far as exports are concerned, Afghanistan’s
exports to both India and Pakistan increased. Have a quick view of historical
data of Afghanistan trade with India, Iran, China and Pakistan recorded from
2015 to 2019.
Year |
Iran (Import Value USD Million) |
China (Import Value USD Million) |
Pakistan (Import Value USD Million) |
India (Import Value USD Million) |
2015 |
1,807 |
1,043 |
1,346 |
130 |
2016 |
1,265 |
1,092 |
1,198 |
152 |
2017 |
1,212 |
1,179 |
1,293 |
258 |
2018 |
1,264 |
1,165 |
1,086 |
354 |
2019 |
1,247 |
1,156 |
1,058 |
404 |
Year |
India (Export Value USD Million) |
Pakistan (Export Value USD Million) |
China (Export Value USD Million) |
Iran (Export Value USD Million) |
2015 |
188 |
226 |
10 |
29 |
2016 |
230 |
283 |
4 |
18 |
2017 |
356 |
357 |
11 |
18 |
2018 |
359 |
378 |
28 |
19 |
2019 |
410 |
298 |
31 |
14 |
What
could happen next?
How the Taliban plan to
govern Afghanistan and trade with countries, particularly India remains
unclear.
Get full Afghanistan import data and data of other countries that will be impacted majorly by Taliban takeover power in Afghanistan. Contact Us for any data requirement and our sales experts will reach you regarding any query.
