Highlights:
- Afghanistan’s supply of some spices and dry fruits has been stopped.
- India imposes lower customs duties on items imported from Afghanistan.
- Now that the Taliban has blocked two important land-trade terminals on the Pakistan-Afghanistan border, traders have to search for alternative destinations.
The current geopolitical crisis in Afghanistan may soon make a hole in your pocket, as supplies of aromatic asafoetida, a specific kind of cumin used in ‘biryani,’ and dry fruits such as figs, apricots, and green and black raisins have been abruptly halted. Afghanistan imports are subject to reduced customs duties in India. As a result, Indian businessmen used to import these products from Afghanistan with long-term supply plans in place and avoided reaching out to alternative destinations. Now that the Taliban has closed two important land-trade terminals on the Pakistan-Afghanistan border, traders have to search for alternative places to import these products, thereby raising domestic prices.
President of the Dry Fruit Traders Association, Vijay Kumar Bhuta said, “Many of these items that we import from Afghanistan are not available anywhere else, and even if they are, they would be imported at a cost because we are able to import dutyfree under South Asian Free Trade Agreement (SAFTA) until now.”
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Despite the fact that India buys dried apricots from Iran, Turkey, and Pakistan, Afghanistan contributed more than 85 percent of the nutritious dry fruit to India in FY21. Similarly, past fiscal year, Kabul supplied 99 percent of fresh and dried figs in India.
In addition, figs, apricots, green and black raisins, and small quantity of pistachios and almonds are imported from Afghanistan. Among spices, hing and a specific kind of cumin used in biryani hails from Afghanistan, although China is the major supplier of cumin seeds (neither crushed nor ground), followed by the UAE, according to the business daily.
Eighty percent of India’s imported hing hails from Afghanistan, which is of higher quality than Iranian hing. Though it is currently grown in Tajikistan and Uzbekistan, India does not have trade agreements with them to benefit from duty exemptions. “We are in a holding pattern, but this needs to be resolved before Diwali. Our Afghan colleagues have also closed their doors for the time being. Consumers may expect a 10-15% increase in costs till we begin imports,” Bhuta told the publication.
‘No officers to clear consignments.’
Traders have approached the government, hoping for a quick resolution to the trade route’s closure.
In 2011, India abolished basic customs tariffs for all LDCs (Least Developed Countries) in the South Asian Association for Regional Cooperation, allowing all Afghan products, excluding alcohol and tobacco, duty-free access to the Indian market. Afghanistan, as an LDC, is a signatory to SAFTA (South Asian Free Trade Area) and is expected to reduce tariffs on all commodities that are not on its sensitive list to 5% or less. In 2003, the two countries signed a Preferential Trade Agreement under which India granted significant duty reductions to particular types (38 types) of Afghan dry fruits.
“Banking institutions are closed in Afghanistan, and there are no customs inspectors to process consignments and provide the necessary certifications,” a Mumbai-based importer of fresh and dried fruits told the financial daily.
