Pakistan-Afghanistan trade reduces by 50% as India enters Afghan market

Karachi : Afghanistan’s trade with Pakistan has reduced by about 50% with India’s entry into the Afghan market. India is selling its products at a subsidised rate in Afghanistan and has also simplified the rules for Afghanistan nationals to come to India. Pakistan is complaining that these policies are affecting Pakistan.

According to a report published in the leading Pakistan daily ‘Don’, Pakistan is rapidly losing its traditional market in Afghanistan. The news refers to Zubair Motiwala, Chairman of the ‘Pakistan-Afghanistan Joint Chamber of Commerce’ as the source. According to the report, Pakistan’s trade with Afghanistan, two years ago, was worth $2.7 billion which has now come down to $1.2 billion..

The exports from Pakistan to Afghanistan were $1.43 billion in 2016. This has reduced to $1.27 billion in the year 2017. On the other hand, the imports from Afghanistan into Pakistan have increased from $46 million to $68 million for the same period.

Pakistan mainly exports cereal flour, garments and meat to Afghanistan. Afghanistan is one of the few countries whom Pakistan is trading with and till now Pakistan has benefited a lot from this trade.

But in the last three years India has captured the Afghanistan market and has given a jolt to Pakistan.

100 out of the 200 cereal flour mills in Peshawar, exporting flour to Afghanistan, have had to close down due of this. The readymade garment market also has been captured by the cheaper goods sourced from India and China. The number of containers transiting through Pakistan, carrying goods to Afghanistan has reduced from 70,000 in the previous years to 7000 as the import routes into Afghanistan have changed, claimed Zubair Motiwala.

The Afghan nationals were coming in large numbers to Pakistan for medical treatment. Now they travel to India, so the medical tourism market also has been snatched away by India. India is offering 75% subsidy on air travel to Afghan nationals and has drastically reduced the visa processing charges. The rules for the visa have also been simplified. Due to this, the Afghanistan people prefer to travel to India rather than Pakistan, Motiwala said.

Last year, India had imported thousands of tonnes of wheat to Afghanistan through the Iranian Chabar Port. India had also started an air corridor to export directly to Afghanistan. The Pakistan media had started expressing fears that Pakistan might lose its market in Afghanistan. Currently, Pakistan’s economy is in doldrums. Pakistan has debts of billions of dollars on the economy and the Pakistan exports are reducing drastically. Pakistan exports have declined to levels below $20 billion which is less than even Bangladesh. The experts in Pakistan have started to express concern over declined Pakistani exports.