The Taliban’s control of Afghanistan has resulted in a rise in the pricing of goods that India imports. With commerce between the countries halting, numerous types of dried fruits and spices are in limited supply, and prices have soared ahead of the holiday season.
India’s dry fruit sellers are suffering as prices for dried fruits skyrocket by as much as 30-70 percent only weeks before the country’s festive season.
“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 have been able to import duty-free under the South Asian Free Trade Agreement (SAFTA) until now,” said Vijay Kumar Bhuta, president of the Dry Fruit Traders Association.
Purchasing dry goods such as almonds, figs, apricots, saffron, raisins, and pistachios occurs throughout the forthcoming festival months, beginning with Dusshera and ending with the Hindu holiday of Diwali in November.
According to Ajay Sahai, Director General of the Federation of Indian Export Organizations, the top organization of India’s export promotion councils, trade has come to a halt since the Taliban took over Kabul on August 15.
“We are keeping a close eye on events in Afghanistan. Imports from there pass through Pakistan on their way to the rest of the world. “At the present, the Taliban has halted freight transportation to Pakistan, therefore imports have almost ceased,” said Sahai.
“In the absence of fresh material, suppliers are selling old stock at higher prices, and have even doubled (rates),” said Raminder Singh, a wholesale trader.
“All of the Afghan dry fruit goods have increased in price by at least Rs. 300-500/kg (5 Euros),” claimed Manoj Singh, another south Indian merchant.
According to India’s Chambers of Commerce and Industry, the country is the largest market for Afghan products in South Asia.
“We hope that prices will stabilize, but there is no clarity on how or when the situation will improve,” said a senior trade official.
Typically, goods from Afghanistan arrive in India via the sea route via Iran’s Chabahar port, and subsequently consignments pass via the Attari border’s integrated check station with Pakistan.
Agriculture accounts for more than 65 percent of Afghanistan’s exports, according to World Trade Organization (WTO) trade profiles for 2020. Dry fruits are among the most important agricultural goods exported from the country. India is the country’s second-largest export destination, accounting for 40.6 percent of total exports in 2018.
According to industry estimates, India’s imports total about US$1.4 billion (1.19 billion Euros) each year, with Afghanistan accounting for up to 85 percent of dry fruit imports.
Traders have approached the government, hoping for a quick resolution to the trade route’s closure.
Khari Baoli dry fruit market has a long history with Kabul
Afghanistan has been driving the dry fruit sector in Khari Baoli, India’s largest dry fruit market and home to some of the country’s oldest dry fruit importers.
Surjeet Singh, a wholesale dry fruit dealer, is very concerned about the ongoing conflict in Afghanistan.
“My business is totally dependent on Afghanistan; nearly everything here is sourced from there,” Singh says, pointing to a variety of dry fruits neatly displayed in small containers inside his store in Katra Ishwar Bhawan, in Khari Baoli in old Delhi. “No other market in the country has deeper or older links to Afghanistan than this market.”
According to the Union Ministry of Commerce’s trade database, India’s imports from Afghanistan were estimated to be about 3,700 crores in 2020-21, with fruits and nuts accounting for more than 2,300 crores. According to some estimates, up to 85 percent of India’s dry fruits originate from Afghanistan, and the majority of it is imported by the hundreds of dealers and importers in Khari Baoli, including Singh.
Khari Baoli in Chandni Chowk has been a significant commercial area since the Mughal Empire, drawing dried fruit vendors and merchants from all over the country and overseas. Pathan traders, who travelled in caravans carrying carpets and dry fruit, established trade networks that stretched from Afghanistan to Delhi and beyond in the 18th century.
“They sold their wares at Chandni Chowk at open adat shops (commission shops) of local vendors,” recalls Lalit Kumar Gupta, former general secretary of the Kirana Committee Delhi, an association of Khari Baoli dry fruit and spice dealers. According to an inscribed stone on the wall of its first-floor office in the bustling market, it was founded in 1906, making it the oldest traders organisation in Chandni Chowk. The Pathans, who have long been involved in the dry fruit trade in Afghanistan, continue to dominate the dry fruit trade with India.
Following Partition, many large dry fruit dealers in Peshawar and Quetta — the other two major hubs of the dry fruit sector in undivided India — moved to Khari Baoli, increasing and broadening the walled city market’s economic links with Afghanistan.
In 1952, these Peshawar businessmen founded the Indo-Afghan Chambers of Commerce, which now has over 250 members, including some of the market’s oldest and largest dry fruit importers.
“The goal was to boost trade between the two countries. “It included traders from both India and Afghanistan when it was formed,” recalls Kanwarjit Bajaj, 79, head of the Indo-Afghan Chambers of Commerce and proprietor of the Tulsi Nuts and Dry Fruits brand, one of India’s largest dry fruit importers and exporters.
The Indo-Afghan Chambers of Commerce, a first-of-its-kind commercial group intended at strengthening trade connections between the two nations, was established in Katra Ishwar Bhawan in Khari Baoli, where it still maintains an office.
“Many of the dried fruit dealers here maintained an office in Kabul. We closed our office in the early 1990s, like most others, due to the increasing security situation in that country,” recalls SM Wadhwa, owner of Hind International Company, another major dry fruit importer in the market.
During the previous Taliban government, from 1996 to 2001, the dried fruit trade with Afghanistan was hampered. In 2003, India and Afghanistan inked a Preferential Trade Agreement (PTA) under which India granted significant duty reductions to specific types of Afghan dry fruits ranging from 50% to 100%. Trade resumed in 2005 and has been gradually increasing since then.
Many Khari Baoli traders began to return to Afghanistan, and approximately ten years ago, an increasing number of Afghan traders began to visit Khari Baoli, with some even renting residences in surrounding regions for extended stays. “They started arriving since many of them thought they weren’t getting a fair deal locally in terms of costs and timely payments,” says an unnamed local dealer.
“Many Afghan businessmen wish to have their own stores and offices, but for the time being, they provide dry fruit samples and establish the price, after which local dealers import their dry fruit. “The Afghan traders wait in the market until the cargo is sold and they get paid,” says Kapil Gulati, owner of Kandhar Trading.
“This is peak season, when we get the fresh harvest of dried fruits from Afghanistan. The largest difficulty in the country after the present crisis is the collapse of banking services, which means we can’t make financial transactions with traders there. We are also unable to complete the essential documentation since many Afghan government employees are still not working,” Gulati explains. “Some Afghan businessmen who were looking for work have become stranded in Delhi after the Taliban took over the country.”
Gulati claims his father called the company Kandhar Trading as an homage to Afghanistan’s Kandahar, where he had close commercial relations.
In reality, Gulati’s is not the only business named after Afghanistan or an Afghan city; there are numerous more, including Afghan Store and Kabul di Hatti. “We called it Kabul di Hatti since my family has origins in that city,” explains Pawandeep Singh, owner of Khari Baoli, a dry fruit retail business.
Surprisingly, many local market traders who have dealt with Afghan vendors for decades can speak Pashto.
Most local traders believe that one of the reasons why the Afghan issue has had little influence on business, other from a minor increase in pricing on select dry fruits, is because a lot of dry fruits are now arriving from nations such as the United States, Chile, and Peru, among others. Mamra and Gurbandi almonds, black raisins, apricots, pistachios, and spicy spices such as asafoetida are now among the dry fruits imported into India from Afghanistan.
“Although the United States has surpassed Afghanistan in terms of almond production, the market remains reliant on Afghanistan for everything else. No other country can compete with its broad range of dried fruits. As a result, Afghanistan is as vital to our market as it has always been,” adds Wadhwa.