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India-Afghanistan air connectivity: The economic significance

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By Tridivesh Singh Maini-During an interaction, organized by the Confederation of Indian Industry with local businessmen – involved in export and import — at the border town of Amritsar (Punjab, India) Afghanistan’s Ambassador to India, Shaida Mohammad Abdali, stated:

‘We plan to resume the freight and passenger link between Amritsar and Kabul by Dec. 31st. This will make Amritsar a major gateway for import and export between the two nations’.

The Ambassador, during a meeting with Punjab Chief Minister (India), Captain Amarinder Singh apart from proposing the revival of the Amritsar-Kabul flight, also discussed the possibility of a pilot project of 1500 tonnes of Cargo trade. His idea was welcomed by the Punjab Chief Minister.

Over the past decade, India has sought to improve trade and connectivity with Afghanistan and Central Asia via Pakistan. Former Prime Minister, Dr.Manmohan Singh a famous speech at FICCI (Federation of Indian Chambers for Commerce and Industry) in 2007 stated.

I dream of a day, while retaining our respective national identities, one can have breakfast in Amritsar, lunch in Lahore and dinner in Kabul. That is how my forefathers lived. That is how I want our grandchildren to live.”

In recent years, there have been glimmers of hope, where it seemed, that not only would bilateral trade ties between India and Pakistan improve, but the latter would also emerge as a gateway to Afghanistan and Central Asia.  Deteriorating political ties, and the obduracy of the Pakistan army in opposing any sort of thaw, have meant that not much progress has been made either in bilateral trade, or providing access via land.

In spite of Afghanistan’s repeated arguments in favor of making India part of the APTTA (Afghanistan Pakistan Transit trade agreement), signed first in 2010, Islamabad has turned it down on some pretext or the other. In 2016, Afghanistan had even gone to the extent of threatening Pakistan, that it would block Pakistan’s access to Central Asia, if Pakistan did not permit Afghanistan to trade with India, via Wagah.   More recently, the Afghanistan President in a speech in New Delhi, had yet again spoken about including India in the APTTA.

Logic for Air Connectivity and Chabahar

India realizing the fact, that Pakistan was not interested at least in the short run in emerging as a gateway, has thus begun to look at alternatives, funding of the Chabahar Port in Iran, signing of an agreement between India, Iran and Afghanistan for a trade and transit corridor, during PM Modi’s Iran visit in June 2016 are clear steps in this direction. Apart from this, India has also started an Air freight corridor. In June 2017, a New Delhi-Kabul flight carried 100 tonnes of cargo.

The aim of this Corridor is to give a fillip to bilateral trade, which is way below potential and estimated at 700 Million USD. This level of trade is low, given the fact that in other areas, especially assistance for capacity building India is one of the frontrunners. Since 2001, India has assisted Afghanistan with 2 Billion USD and is the fifth largest donor. During Ashraf Ghani’s visit to India, the Indian government provided 1 Billion USD. Two clear instances of India’s frontline role in institutional building and development are the Salma Dam (Afghan-India Friendship Dam), inaugurated by PM Modi in June 2016 along with the Afghanistan President,  and the Afghan Parliament (constructed at a cost of 90 Million USD) which was inaugurated by the Indian PM during his visit in December 2015.

What is also significant about the Afghan Ambassador’s proposal is that for long the landlocked state of Indian Punjab has sought to benefit from bilateral trade with Pakistan, and greater connectivity. In the short term, such possibilities seem minimal. Greater air connectivity will give a much needed boost to businesses not just from India, but from within Punjab. The Afghan Ambassador during his meeting with the Punjab Chief Minister suggested that a trade corridor can be commenced through a cargo trade pilot project, consisting of pharmaceutical goods, engineering products, woolens, dairy items, fresh and dry fruits, meat, He also suggested, that Punjab should import meat products from Afghanistan. It would be pertinent to point out, that in pre-partition days, Punjab and Afghanistan shared close trade ties, enhanced air connectivity could create an opportunity to re-kindle such ties.

Apart from the economic benefits for both Punjab and Afghanistan, air connectivity will also make it easier for Afghan students, wanting to pursue their studies in Punjab, as well as Afghan patients seeking treatment in Punjab.

In conclusion a few points need to be kept in mind:

First, air connectivity should be enhanced between Kabul and cities other than Delhi, this will help not just in enhancing business links, but also people to people and trade ties. These should be targeted at cities, where Afghan students go for higher studies as well as cities where there are prospects for strengthening business linkages.

Second, irrespective of ties between Washington DC and Tehran India is giving Chabahar high priority in the context of connectivity goals with Afghanistan and Central Asia. A clear indicator of this is the wheat consignment, which was recently sent to Afghanistan through Chabahar. Given the trilateral agreement, it is not only India, but even Afghanistan which has high stakes in the Chabahar Project.

Third, if China wants to strengthen economic ties with India, and wants the latter to consider participation in the CPEC project, it has to address not just India’s concerns with regard to the project passing through disputed territory, but also needs to get Pakistan to change its approach towards Indian participation in regional connectivity. If Pakistan does not grant India MFN status, and keeps India out of the APTTA, there is absolutely no way India can think of exploring synergies with China.

Fourth, the India-Afghanistan-Iran trilateral is extremely important, and by keeping strong ties with Iran which is geo-politically important, New Delhi and Kabul are sending a clear message to Washington DC, that while both give high priority to their ties with the US, they will not necessarily toe US’ approach towards Iran.

Tridivesh Singh Maini is a New Delhi based Policy Analyst associated with The Jindal School of International Affairs, OP Jindal Global University, Sonipat