India and Afghanistan Revive Economic Engagement: A New Chapter in Bilateral Trade and Connectivity
- MGMMTeam
- 3 days ago
- 3 min read
India and Afghanistan have embarked on a renewed path of cooperation, signalling a significant shift in diplomatic and economic engagement after years of limited interaction. The recent high-level meeting between Union Commerce Minister Piyush Goyal and Afghanistan’s Industry and Commerce Minister Alhaj Nooruddin Azizi has set the stage for a deeper, more structured economic partnership between the two nations.
Rebuilding a Historic Partnership
The meeting in New Delhi marked a meaningful attempt to restore the long-standing relationship built over cultural ties, developmental cooperation, and mutual trust. Minister Azizi described his five-day visit as an effort to revive the “historic bond” between the countries, emphasizing Kabul’s commitment to creating new trade routes and expanding cooperation in mining, agriculture, pharmaceuticals, and healthcare.
India, which has historically played a major role in Afghanistan’s development and infrastructure building, reiterated its willingness to enhance economic engagement despite the diplomatic challenges that have unfolded since 2021.
Strengthening Trade and Connectivity
A major highlight of the discussions was the shared intention to increase bilateral trade to nearly USD 1 billion. Both sides acknowledged that improved connectivity is essential to achieving this target. In this context, India and Afghanistan agreed to operationalize new air-freight corridors linking Kabul with Delhi and Amritsar. The corridors are expected to reduce the high logistical costs that have hindered the flow of goods, particularly perishable agricultural products.
Afghanistan also expressed interest in expanding trade through Iran's Chabahar Port, an important alternative that bypasses Pakistan and strengthens regional supply chain resilience. India welcomed the proposal, recognizing the port’s strategic importance for both countries as well as for broader regional connectivity.
Addressing Long-Standing Obstacles
For years, trade between India and Afghanistan has been hampered by high transport costs, visa restrictions for Afghan traders, and administrative hurdles. Minister Azizi noted that visa issues and air-corridor costs have now been resolved, removing two of the biggest bottlenecks to commercial engagement.
India also plans to increase the issuance of medical visas, responding to Afghanistan’s growing demand for healthcare access. As part of the broader collaboration framework, both countries have agreed to appoint commercial attachés in their respective missions and revive joint chambers and working groups that were inactive for years.
Shifting Trade Patterns and Emerging Opportunities
Since the Taliban’s return in 2021, Indian exports to Afghanistan have declined sharply, while Afghan imports into India—mainly dried fruits, saffron, figs, and agricultural goods—have increased. This unusual trade imbalance is expected to stabilize as both sides work toward greater policy coordination and smoother transactions.
Afghanistan’s push for zero tariffs on selected goods and reduced trade fees is likely to encourage higher volumes of Indian exports in sectors such as pharmaceuticals, processed food, construction materials, and machinery.
Diplomatic Signals and Regional Implications
The economic dialogue carries deeper diplomatic significance. India has recently upgraded its technical mission in Kabul to a full-fledged embassy, indicating a calibrated but meaningful shift towards structured engagement with the Taliban administration. India has not granted formal recognition but continues to emphasize development, humanitarian assistance, and trade cooperation.
International observers see this renewed engagement as part of India’s strategic approach to prevent regional isolation, counter competing influences, and ensure that Afghanistan does not become a zone of instability affecting South Asia. Afghanistan, too, is seeking to diversify its external partnerships and reduce dependency on narrow trade routes.
The MGMM Outlook
India’s renewed engagement with Afghanistan marks an important shift in regional diplomacy, reflecting New Delhi’s commitment to stabilising its neighbourhood and reclaiming strategic space lost after 2021. The revival of economic dialogue—highlighted by talks between Piyush Goyal and Nooruddin Azizi—shows India’s intent to rebuild a historic partnership that has always been rooted in civilisational ties, development support, and mutual trust. For Afghanistan, seeking India’s cooperation is a deliberate move to diversify beyond Pakistan-dependent routes and secure reliable economic partners. The reopening of air-freight corridors, interest in expanding trade via Chabahar, and the easing of visa norms signal a practical reset aimed at restoring normalcy in bilateral exchanges.
This renewed cooperation is not just about trade but about reasserting India’s role as a stabilising force in South Asia. While global players hesitate to engage with Kabul, India’s calibrated approach—upgrading its mission, expanding medical visas, and resolving logistical barriers—demonstrates responsible leadership rooted in long-term vision rather than short-term politics. As Afghanistan seeks zero tariffs and smoother trade channels, India stands to benefit from expanded exports and deeper regional influence. This alignment of strategic, economic, and humanitarian interests strengthens India’s position while fostering a secure and mutually beneficial partnership that counters disruptive regional influences and reinforces India’s presence in a geopolitically sensitive zone.
(Sources: NDTV, India Today, Outlook India)
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