Afghanistan’s Ministry of Commerce and Industries officials on Monday said both sides recognize the need to implement the World Road Association agreement and to lower transit costs.
According to the Afghan ministry officials, the drop in tariffs will hopefully increase exports from Afghanistan to Iran, India and Persian Gulf countries.
“It was a productive meeting and scrapping the bank guarantee (regulation) for Afghanistan’s trucks has been a big achievement,” said the ministry’s spokesman, Muafir Quqandi.
Major Trade Partners
Statistics show that Iran has in recent times become a major trade partner to Afghanistan and that bilateral trade has crossed the $2 billion/year mark.
According to Jaber Ansar, the Afghan commercial attache to Iran, Iran holds a 22% share ($2.5 billion) from Afghanistan’s $11.5 billion consumer market.
Afghanistan’s exports to Iran have been as little as a dozen million dollars on average over the past decade.
According to Mohammad Mehdi Javanmard Qasab, the head of Trade Promotion Organization of Iran’s Afghanistan Desk, Iran exported $2 billion worth of goods to Afghanistan during the 10 months to Jan. 20, unchanged compared with last year’s corresponding period.
Exports mainly included chemical products, construction materials, metal, rebar, pastry, chocolate, food and floorings.
Iran’s imports from the neighboring country during the period mainly included unprocessed stones and silkworm cocoon to reach $16 million, registering a 14% decline year-on-year.
Afghanistan’s Chamber of Commerce and Industries Spokesman Seyam Pesarlay said if border tariffs and processes are eased, Afghan traders will increase import and export trade through Iran.
“We want to use the International Transport of Goods Under Cover of TIR Carnets [TIR Convention] for exporting to Iran, some Central Asian countries and some European countries,” said Pesarlay.
According to economic experts, expansion of trade ties with neighboring countries will increase Afghanistan’s exports and help break the tradition of Afghanistan having to rely on only one or two countries for imports and exports.
TIR Convention is a multilateral treaty concluded in Geneva in 1975 to simplify and harmonize the administrative formalities of international road transport.
The convention establishes an international customs transit system with maximum facility to move goods. It not only covers customs transit by road but a combination is possible with other modes of transport, including rail, inland waterway and even maritime transport, as long as at least one part of the total transport is made by road.
Joint Economic Commission in March
The third meeting of Iran-Afghanistan Economic Commission will be held in Tehran in March, according to Afghanistan’s Chamber of Commerce and Industries.
The two sides will discuss expansion of trade and transit ties, opportunities for joint investment in different sectors, expansion of infrastructure at Chabahar Port and the launch of branches of Afghan banks in Iran.
“We want government officials to discuss joint investments and convince Iranian investors to invest in different sectors in Afghanistan,” ACCI Spokesman Seyam Pesaral has been quoted as saying.
Chabahar in the Limelight
Iranian Embassy officials in Kabul have been recently quoted as saying that among the 500 companies licensed to operate in Chabahar, 165 are Afghan.
Afghanistan’s Ministry of Commerce and Industries said Iran has provided special privileges to Afghan investors at Chabahar.
“The problem of getting visas for Afghan investors to Iran has been solved and efforts are underway to provide further facilities to our investors,” said Yahya Akhlaqi, transit director at the Afghan ministry.
Earlier, Afghan news agency Wadsam cited the economic attaché at the Iranian Embassy in Kabul, Mohammad Reza Karimzadeh, as saying that Iran is offering an 80% discount in export tariffs and a 75% discount on import duties to Afghan traders using Chabahar.
Tehran, New Delhi and Kabul signed a trilateral agreement to develop Chabahar in Tehran in May 2016. Afghanistan is a major destination for Iranian exports.
The first phase of the port was inaugurated by Rouhani in December last year, a little over a month after the first consignment of wheat from India to Afghanistan was sent via this facility.
“India began routing wheat consignment to Afghanistan through Chabahar Port recently. This is while Afghanistan plans to ship a consignment of fresh and dried fruit to India through Iran’s Chabahar Port for the first time in the first half of the next Afghan year starting March 21,” Director General of Afghan Ministry of Commerce and Industries’ Transit and Transportation Bureau Yahya Akhlaqi said.