Afghanistan Economic Gambit For India And China?

by GoNews Desk 10 months ago Views 1063

Taliban has currently prevented Indian trade with Afghanistan by blocking the transit routes into Pakistan through which cargo travels to and from India. As of August 20, 2021, the Taliban's spokesperson through Twitter has denied "rumours" of wanting to stop trade or diplomatic relations with any country. Indian authorities are reported to be "closely monitoring" the situation. 

India China Trade Afghanistan
In recent years, the economic and geopolitical trajectory of India and China has diverged. Regionally, the two most populated countries in the world are seen as competing powers. In recent years India has been on the backfoot in terms of foreign policy, and the crisis unfolding in Afghanistan appears to be no different.

China and India are and have historically been significant trading partners of Afghanistan, given their proximity and cultural relationships. Afghanistan is also situated at a strategically important location with respect to the contestation over the Aksai Chin region between India and China.


ANI  quoted Dr. Ajay Sahai, Director-General of Federation of Indian Export Organizations, who said that the Taliban has currently prevented Indian trade with Afghanistan by blocking the transit routes into Pakistan through which cargo travels to and from India. 

“As of now, Taliban has stopped the movement of cargo to Pakistan, so virtually imports have stopped”. Dr. Sahai said that India’s exports to Afghanistan were worth around $835 million and imports were worth $510 million.

Regarding the Taliban’s rapid takeover of Afghanistan from the U.S.-backed government, India has not been proactive in making its official stance.  China’s Foreign Minister Hua Chunyin’s statements, on the other hand, went beyond the common note of “inclusive dispensation” that India has sounded.

China’s statement had much in common with the world’s, such as calling for a “peaceful transition” and inclusive political structure. But it also highlighted its role as a major political mediator and financial investor in the region.

Chunyin said that China looks forward to its “participation in Afghanistan’s reconstruction and development”, adding further that “The Afghan Taliban said on multiple occasions that it hopes to grow sound relations with China, [and] looks forward to China’s participation in Afghanistan’s reconstruction and development”

 The Observer Research Foundation has reported that China is looking to fill the vacuum left by the U.S-N.A.T.O withdrawal with $62 billion as part of the Belt and Road initiative. A US $5 million project to build a road on the Afgan side of Wakhjir Pass in the 80-km border between the two countries may also get underway. This will connect Afghanistan to the BRI and China’s ‘Silk Road’ project.

India too, has made vital infrastructure investments in Afghanistan and aided in its reconstruction after successive decades of conflict. India’s developmental assistance is estimated upwards of $3 billion. The ‘Afghan-Indian Friendship Dam’ (Salma Dam) completed in 2016 in Herat province, and the $90 million National Assembly building built and inaugurated by India in 2015, are two examples.

It remains to be seen how Indian investments will continue and scale up after the recent regime change in Afghanistan.

 Economic influence is a precursor to geopolitical heft. By emphasizing on Afghanistan’s sovereignty and the principle of non-interference, China seems to be demarcating itself from its neighbors, including India which was part of the alliance to overthrow the Taliban government 20 years ago.

China’s Belt-and Road Initiative, and its infrastructure projects in Pakistan (CPEC) show that its scope of activities and ambitions as much broader and comprehensive than India’s. It remains to be seen which of these two countries will be able to maintain the greater sway in economic matters and geopolitical issues.

As it stands, India’s trade with Afghanistan is halted while China and Taliban have expressed a mutual outreach for financial investment and developmental “reconstruction”. China has a large, worldwide project and plan in place within which to integrate Afghanistan, while India seems to be  lacking on this front.

As of August 20, 2021, the Taliban's spokesperson through Twitter has denied "rumours" of wanting to stop trade or diplomatic relations with any country. Indian authorities are reported to be "closely monitoring" the situation. 

 

 

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