The Future of Afghanistan-Pakistan

Trade Relations
Published: 
August 17, 2015
By: 
Ishrat Husain and Muhammad Ather Elahi
Pakistan and Afghanistan are among each other’s largest trading partners. Though an agreement
was signed in 2010 to strengthen trade relations and facilitate Afghan transit trade through
Pakistan, implementation has been mixed, with many on both sides of the border complaining of
continued barriers to exchange. Both nations need to improve trade facilitation through
streamlined payments settlement and improved insurance mechanisms, the use of bonded
carriers, visa issuance, trade financing, tax collection, and documentation.

Summary
 Pakistan is Afghanistan’s largest trading partner, while Afghanistan is Pakistan’s second-
largest export market.
 Both Pakistan and Afghanistan face significant challenges in their respective security,
political, and economic realms over the coming years. The drawdown of NATO forces from
Afghanistan has dealt a negative shock to both economies, particularly in the transportation
sector.
 While an agreement was signed in 2010 to strengthen trade relations and facilitate
Afghan transit trade through Pakistan, implementation has been mixed, with many on both sides
of the border complaining of continued barriers to exchange.
 Peaceful economic cooperation between Afghanistan and Pakistan and improved trade
and transit facilities could help connect South Asia with Central Asia.
 Both nations need to improve trade facilitation through streamlined payments settlement
and improved insurance mechanisms, use of bonded carriers, visa issuance, trade financing, tax
collection, and documentation.

About this Brief

This brief is based on primary research conducted by the Institute of Business Administration
(IBA), Karachi, on future trade prospects between Pakistan and Afghanistan. The full study, to
be published by IBA, couples detailed analysis of macroeconomic conditions and trade flows in
the region with interviews of stakeholders in the public and private sectors on both sides of the
border. Focus groups with the business community were conducted in Karachi, Peshawar, and
Kabul in November and December 2014. Dr. Ishrat Husain is dean and director, IBA Karachi;
Dr. Muhammad Ather Elahi is an assistant professor, IBA Karachi.

Introduction
Relations between Pakistan and Afghanistan have historically been tense. Cross-border
infiltration, refugees, drug trafficking, militant groups, and disputes over counterterrorism policy
and dialogue with terrorist networks have contributed to an entrenched trust deficit and have
eroded relations. These issues have impacts beyond the security sector, complicating efforts to
build stronger trade and economic ties. Despite tensions, Pakistan is today Afghanistan’s largest
trading partner, and Afghanistan is Pakistan’s second-largest trading partner.

Aggregate demand in Afghanistan is expected to decline in the coming years as a result of

reduced aid and other foreign exchange inflows, meaning Pakistan also needs to formulate
strategies to mitigate the effects of this downturn on Pakistan’s economy. As a landlocked
country, Afghanistan will remain dependent on Pakistan and Iran for its overseas trade. Afghan
stakeholders hoped to work on a joint economic zone that could greatly enhance the trade for
both countries. There are potentially significant opportunities for Pakistani investors in
Afghanistan, but these will not be realized until financial mechanisms are streamlined and
infrastructure development and personal security are guaranteed.

Bilateral Trade Profile

Trade between Pakistan and Afghanistan has increased substantially, from $0.83 billion in FY06
to $2.1 billion in FY13.1 Pakistan supplies the largest share of total Afghan imports, at 24.3
percent as of FY13,2 but this share has declined since 2011 owing to a combination of factors,
including political instability, customs delays, suspensions of NATO supply shipments, and other
issues. While Pakistan’s share in transit trade has declined, Iran’s share has steadily increased.
India, Iran, and Afghanistan have recently finalized a draft for a new transit trade agreement; the
planned land route will run from Iran’s Chabahar port, in the Gulf of Oman, connecting
Afghanistan to the Persian Gulf and allowing the movement of goods from South Asia into
Afghanistan and Central Asia.

Afghanistan’s total reported exports are currently equivalent to only 5 percent of total imports,
with exports amounting to $363.70 million in FY13.3 Pakistan is the largest export destination,
accounting for 32.2 percent of all Afghan exports; even without direct transit access, India forms
the second-largest destination for Afghan exports, at 27 percent of the total.

Transit Agreements
Afghanistan’s landlocked status means it relies on neighbors to facilitate the transit of its trade
with the broader global economy. The two countries initially signed the Afghanistan Pakistan
Transit Trade Agreement (APTTA) in 1965.4 The APTTA was redesigned in 2010 to allow the
transit of Afghan exports through Pakistan to the Wagah border with India, and to the seaport
cities of Karachi and Gwadar. Pakistani trucks in turn are allowed to move products to all
regions of Afghanistan. The agreement also led to the formation of a joint chamber of commerce.
In July 2012, Afghanistan and Pakistan agreed to extend the APTTA to Tajikistan, a first step in
the establishment of a north-south trade corridor.5 The proposed agreement would allow
Tajikistan to use Pakistan’s Gwadar and Karachi ports for its imports and exports, while Pakistan
would enjoy trade with Tajikistan under terms similar to the transit arrangement with
Afghanistan. Recently, a ministerial delegation from Tajikistan arrived in Pakistan to explore
trade prospects in various sectors.

During his visit to Pakistan in November 2014, newly elected Afghan president Ashraf Ghani
highlighted Afghanistan’s potential to function as a land bridge between Pakistan and Central
Asia, and sought the same facility from Pakistan for trade with India. Ghani set a goal of
increasing Afghanistan-Pakistan bilateral trade to $5 billion by 2017. Pakistan in turn agreed to
take measures to clear 95 percent of Afghan goods imported under the transit trade agreement
within twenty-four hours, and to lower tariffs and charges for port and storage facilities.6

Points of Tension
Despite past agreements, continued tensions have prevented the full realization of Afghanistan
and Pakistan’s bilateral trade potential, and will have to be addressed if the goals set out during
President Ghani’s recent visit are to be realized.

Smuggling and Spillover. Afghan proposals to allow the transit of imports from India through
Pakistan have been met with resistance, in part owing to Pakistani concerns that they may be
dumped instead in Pakistan, affecting local industry. Illicit trade between Afghanistan and
Pakistan is a long-standing concern on the Pakistan side; a 2011 study by Pakistan’s Federal Tax
Ombudsman noted that several high-tariff goods, including vehicles, cigarettes, and electronic
items, were being smuggled from Afghanistan to Pakistan.7 Officials estimate that three quarters
of all goods smuggled into Pakistan come through the APTTA before being diverted to Pakistani
markets, evading the imposition of customs duties.8 On the Afghan side, traders complain that
Afghan-origin products are sold back to Afghanistan from Pakistan at higher prices, forcing
Afghanis to pay custom duties on their own goods. Afghan merchants also accuse Pakistani
customs officials of regularly extracting bribes to clear the border or to obtain necessary visas or
other paperwork. There are as well Afghan concerns about low-cost imports from Pakistan
displacing Afghan production of agricultural and other goods.

Trade Controls. At the same time, efforts to control and combat smuggling and other misuses of
the transit trade agreement provoked complaints from traders interviewed on both sides of the
border. Requirements that traders obtain certified customs clearance documents, restrictions on
partial shipments of goods that require all trucks of a given shipment to be present before trucks
can cross into Afghanistan, and heavy security deposits, insurance, and shipment tracker
installation costs all increase truckers’ costs of operations and strain their limited working
capital.

Formal banking ties between Afghanistan and Pakistan remain limited, with traders on each side
of the border forced to rely on unofficial transfers, and with inconsistent exchange rates.
Complaints were also reported regarding road and customs clearance infrastructure in both
countries. According to business community interviewees, the current practice of checking all
containers rather than a randomized selection slows the transit process, and repeat checks on
both the Afghan and Pakistan side of the border add additional transit time. However, during an
April 2015 visit to Kabul, Pakistani commerce minister Khurram Dastagir announced major
steps to improve the situation. These include (1) allowing a system-based partial shipment of
Afghan transit goods instead of manual processing; (2) a reduction in the share of Afghan cargo
that is scanned, from 100 percent to 20 percent; and (3) a goal of increasing the clearance of
almost 90 percent of Afghan cargo on the first day, with 80 percent cleared without scanning.
The commerce minister also pledged to establish joint customs and clearing points for more
efficient movement of cargo across borders.

Removal of Shipping Restrictions. In April 2015, it was also agreed that Afghan trucks bound
for India would be allowed to reach the Wagah border crossing, and on their way back would be
allowed to carry Pakistani exports to Afghanistan, a provision removing previous restrictions.
This should help Afghan businessmen significantly reduce the cost of transportation. Similarly,
Pakistan-origin trucks are allowed to transit through into Afghanistan without reloading. It is
expected that customs revenues for Pakistan will increase as a result of more trade through
Wagah. The truck companies in Afghanistan can become the major beneficiaries of this
relaxation by investing in the trucks and the transport systems.

Regional Transportation Impacts

For Afghanistan, the exit of foreign troops has strong implications for future security and
stability in the region. The success of the new national unity government’s vision of economic
revival and attracting foreign investment will ultimately depend on an improvement in law and
order and effective and strong governance that is able to maintain stability throughout the
country.

Beyond the risk of refugee displacement or cross-border militancy in the event of a deterioration
in the Afghan security situation, the NATO drawdown will also have direct economic impacts on
Pakistan as the military stimulus to both countries’ economies decreases. As an example, most of
Pakistan’s bottled water exports to Afghanistan were consumed by NATO forces.9

Major reductions in bilateral trade would also affect the Pakistani transit, warehousing, and
construction sectors, which may have disproportionate impacts on the poorer inhabitants of
Balochistan and Khyber Pakhtunkhwa provinces employed in these sectors. Many members of
this lowest-quintile segment have been able to escape chronic and intermittent poverty as a result
of increased trade between Afghanistan and Pakistan, underscoring the need to maintain and
expand the gains from bilateral and regional integration.10

Conclusion
 Peaceful economic cooperation between Afghanistan and Pakistan and improved trade and
transit facilities would help connect South Asia with Central Asia. Exportled economic growth
would be expected to increase domestic employment in both countries and provide foreign
exchange to import commodities manufactured more cheaply somewhere else. Afghan officials
see India and Pakistan as the two primary markets for Afghanistan but face obstacles in realizing
this goal. Afghan officials, particularly in the Ghani administration, are seeking to position the
country as a corridor linking Pakistan and Central Asia, but also seek gains of their own through
reduced operational barriers to trade and uninterrupted trade access to India.

The governments of Pakistan and Afghanistan need to make further arrangements for mutually
beneficial trade relations. The following recommendations can provide a path to the long journey
ahead:

 People-to-people contact is a necessary condition for sustainable trade relations;

therefore, business visa policy needs to be relaxed further. Various options, such as visa-on-
arrival, long-term, multiple-entry visas, and investment-friendly visas for businessmen and
skilled workers, could be explored and implemented in letter and spirit.
 A preferential trade agreement between the two countries that would give more market
access to Afghan goods in the Pakistani market and address the issue of smuggling is the need
of the day. This agreement should include a clear roadmap for tariff rationalization in the region
and the removal of double taxation to facilitate investment in both countries.
 As part of this agreement, both sides should commit to support the transit of Pakistani
exports through Afghanistan to Central Asia, and similarly the transit of Afghan exports through
Pakistan to India.
 Nontariff measures also need to be improved, mainly at the customs checkpoints on both
sides of the border. The operational and policy-level reforms should be implemented to facilitate
trade by reducing overhead in checking and testing consignments and improving security
conditions.
 The importance of modern infrastructure, including roads and the railway network, to
trade relations cannot be overemphasized. Both countries should prioritize infrastructure
projects to reduce the cost of transportation. It is important to mention here that the China-
Pakistan Economic Corridor will be instrumental in the development of trade from Central Asia
to South Asian countries.
 The provision of a financial mechanism for trade is mandatory. Instituting an EXIM bank
for trade settlements in multiple currencies is recommended, as is an institutional arrangement
for freight insurance and similar costs

Notes
1. Data from Pakistan Bureau of Statistics,
www.pbs.gov.pk/sites/default/files//external_trade/8_ digit_level/export/5_exp_2008-
09_to_2012-13.pdf.
2. Data provided by Afghan Ministry of Commerce.
3. Data provided by Afghan Ministry of Commerce. Total Afghan exports are estimated by
the World Bank and IMF to be over $2 billion, with most of them unrecorded.
4. Pakistan is required to provide transit facility as per Article V of the GATT 1947, the
New York Convention on Transit Trade of Landlocked Countries (1965).
5. Central Asia Regional Economic Cooperation.
6. Bakhtar News Agency.
7. Federal Tax Ombudsman, ISAF Container Scam, report prepared in response to a request
by the Supreme Court of Pakistan vide suo moto case no. 16/2010 (Islamabad: FTO, 2011),
www. fto.gov.pk/files_upload/annualreports/Annual%20Report%20(2011).pdf.
8. Information was provided by industry officials in a focus group interview, Karachi,
August 2014.
9. Saad Shabbir and Vaqar Ahmed, “Welfare Impacts of Afghan Trade on the Pakistani
Provinces of Balochistan and Khyber Pakhtunkhwa,” Stability: International Journal of Security
& Development 4, no. 1 (February 2015): art. 6, pp. 1–16, doi: http://dx.doi.org/10.5334/sta.e.
Turkey-Afghanistan Economic and Trade Relations
Bilateral Trade
In the last decade, the trade volume between Turkey and Afghanistan has
grown 36-fold.
 
The trade continued to expand in 2009, despite the negative effects of the
global economic crisis and reached to 264 million $ in 2010, with an increase
by 11% in comparison to the corresponding figure of the previous year.
 
Turkish exports are comprising more than 90 % of the total volume of trade.
Statistics

(.000 $)
YEARS EXPORTS IMPORTS VOLUME BALANCE
2000 8.053 497 8.550 7.556
2001 6.983 420 7.403 6.563
2002 20.232 1.053 21.285 19.179
2003 36.489 2.684 39.173 33.805
2004 70.945 6.776 77.721 64.169
2005 113.401 8.301 121.702 105.100
2006 91.106 9.587 100.693 81.519
2007 109.270 12.493 121.763 96.777
2008 136.982 8.506 145.488 128.476
2009 233.675 4.649 238.324 229.026
2010 259.777 5.098 264.875 254.679
Main Commodities Subject to Trade

Turkey’s principal export products to Afghanistan are prefabricated buildings,

electrical conductors, diesel engine vehicles, iron-steel building material,
medicine, non-woven textiles.

Turkey’s main imports are sesame seeds, unshelled walnut, raisin, vegetable
dyes.

Investments

Turkish investments in Afghanistan have been steadily increasing.

Construction is the leading sector for Turkish investments. From August 2002
to the end of 2010, the total amount of the contracts by Turkish contracting
companies in Afghanistan has reached to 2.8 billion dollars. They have
completed 330 projects so far.
The number of Turkish companies is around 50 in construction sector and
more than 70 in total as of 2010.

Legal Framework

Trade Agreement, Economic and Technical Cooperation Agreement and

Agreement on Reciprocal Promotion and Protection of Investments are in
effect.
Bilateral Mechanisms

The last meetings of bilateral economic mechanisms are as follows:

 
-          Turkey-Afghanistan Business Council (10-13 July 2007 - Istanbul),
-          1st Meeting of Joint Economic Commission (JEC) (26-27 April 2005 –
Ankara).
Trilateral Mechanisms including Pakistan

At the end of the 3rd Meeting of Turkey-Afghanistan-Pakistan Trilateral Summit

(January 2010), parties agreed on establishing a Working Group on
Transportation. The first meeting of this Working Group was held on 12-13 July
2010 in Ankara, focusing on cooperation in road and railroad transportation
and civil aviation.
 
Similarly, within the framework of the “Trilateral Summit” mechanism, a
trilateral mechanism was founded under the name of “Istanbul Forum” with
the participation of the Union of Chambers and Commodity Exchanges of
Turkey (TOBB), Federation of Chambers of Commerce and Industry of
Pakistan and Chamber of Commerce and Industry of Afghanistan. “Istanbul
Forum” held its 5th Meeting in Istanbul, on 24 December 2010, within the
margin of 5th Meeting of Trilateral Summit on the same date.
Turkey’s Development Assistance and Contribution to Reconstruction
Activities in Afghanistan

Due to its historical ties and friendly relations with Afghanistan and in support
of the inextricable link between security and development, Turkey has
launched, in coordination with the Government of Afghanistan, its most
comprehensive sustainable development assistance program ever.

Turkey increased its pledge for international support to Afghanistan at the

Paris Conference in June 2008 from 100 million US Dollar to 200 million USD
by taking into account the needs of the Afghan People.
Furthermore, in order to coordinate its contributions to Afghanistan, Turkey
has established a civilian-led Provincial Reconstruction Team (PRT) in Wardak
Province on 12 November 2006. The second Turkish PRT in Jawzjan Province
was inaugurated on 21 July 2010. The PRT’s in Wardak and Jowzjan are both
civilian-led.

Turkey’s multi-dimensional program for Afghanistan concentrates on

education, security, health, agriculture, human resources development and
capacity building. Turkey focuses on projects that will improve the economic
and social conditions of the Afghani people.

Regarding the guidelines on the delivery of development assistance, Turkey

supports and already observes most of the proposed criteria – namely, Afghan
ownership, alignment, harmonization, mutual accountability, capacity
building.

Turkey has completed more than 600 development assistance projects,

reaching at least 7 million Afghanis. In this context, 68 schools and 17 health
clinics/ hospitals have been built or repaired. Turkey meets the administration
costs of two clinics and two hospitals. So far, more than two million Afghanis
have benefited from Turkish assistance in health and education sectors.
Turkey has drilled 168 water wells, providing drinking water to 520 thousand
Afghani citizens.

Most of the projects of Turkey in Afghanistan are carried out by Turkish

International Cooperation and Development Agency (TIKA).
ndia and Afghanistan: A Growing
Partnership
Historically close, ties today are being driven forward by many shared interests.

By M. Ashraf Haidari
September 16, 2015
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India remains an integral part of Afghanistan’s steady progress in institutionalizing peace,

pluralism, and prosperity. Ties between Afghanistan and India go beyond the traditionally strong
relations at the government level. Since time immemorial, the peoples of Afghanistan and India
have interacted with each other through trade and commerce, peacefully coexisting on the basis
of their shared cultural values and commonalities. This history has become the foundation of
deep mutual trust. Public opinion polls in Afghanistan confirm this, as well as the sentiment
Afghans share about feeling at home whenever they visit India.

Against this background of real friendship, it’s appropriate to take stock and see how far
Afghanistan has gone in its journey to become a full-fledged, contributing member of the
international community. It is a journey being undertaken with continued support of India, which
itself is striving to become an anchor of regional stability and prosperity.

Post-Taliban Gains

Although it’s true that conflict continues in Afghanistan, a great deal of progress has been made
in just over a decade. Let’s start with the gains made by Afghan women and girls, who were
denied, under the Taliban, their most basic human rights, such as access to education and
healthcare, let alone the opportunity to serve as vocal representatives of their constituencies in
the Afghan parliament. Yet today female MPs now occupy 28 percent of the seats, a higher
percentage than can be found in the legislative bodies of India, Britain, or even the United States.

And in the 1990s when factional infighting and the tyranny of the Taliban systematically
devastated the country, Afghanistan had barely any diplomatic representation abroad. Today, it
has more than 50 diplomatic missions around the world, including a well-resourced embassy in
Delhi, which serves thousands of Afghan students and medical tourists, while working with its
Indian counterparts in the public, private, and civil society sectors to deepen the multi-faceted
relations that have always underpinned Afghanistan’s partnership and friendship with India.
Indian Development Aid

Afghanistan’s monumental gains in its polity, economy, and society would have been impossible
without the continued support of the international community, and particularly the assistance of
the country’s trusted friends and strategic partners like India, the United States, and NATO.
Despite its own many domestic needs, India is Afghanistan’s sixth largest donor, providing the
country with some $2 billion in effective aid since 2001.

India’s well-targeted aid programs include infrastructure development, institutional capacity

building, small development projects, as well as food security assistance in the form of ongoing
deliveries of wheat to Afghanistan. Since 2001, more than 10,000 Afghan students have studied
in India on ICCR scholarships, with some 7,000 returning home armed with an education and
technical skills, which they are using to drive Afghanistan’s stabilization and development.
Meanwhile, many mid-career officers in the Afghan government have benefited from the
technical capacity building programs of ITEC and the Indian Council of Agricultural Research,
while some 8,000 Afghan students are pursuing self-financed degrees in different fields across
India.

And India’s signature infrastructure projects – the building of the Afghan parliament in Kabul
and the Salma Dam in Herat – are nearing completion. The former will soon give Afghan MPs
the secure space they need to further institutionalize democracy in Afghanistan, while the latter
will generate 42 MW of much-needed power for the electrification of rural and urban Herat, as
well as helping irrigate 80,000 hectares of agricultural land.

In spite of many transit obstacles, the volume of Indo-Afghan trade stood at $680 million during
2013-2014, a figure that should exponentially rise, following the full implementation of the
Afghanistan and Pakistan Trade and Transit Agreement (APTTA). Moreover, air connectivity
between the two countries has grown steadily. There are now four to five flights operating daily
between Kabul and Delhi, bringing to India nearly 1,000 Afghans, many of them medical
tourists, seeking treatment in Delhi hospitals. 

Attracting Indian Investment

To deepen economic ties between the two countries, the Afghan Embassy in Delhi has frequently
engaged with the national and local chambers of commerce and industries of India. The embassy
has so far signed five memorandums of understanding (MOUs) covering commercial and
medical cooperation between Afghanistan’s respective chambers of commerce and hospitals,
while it has initiated another 20 MOUs with state chambers and hospitals across India, in the
coming months.

Indian investors remain deeply interested in the many “virgin markets” of Afghanistan, including
mining, agriculture and agribusiness, information and technology, telecommunications, and
others. Although more than 100 largely midsize Indian businesses have already invested in
Afghanistan, the Afghan government is strongly encouraging capital intensive investment in the
natural resources and infrastructure sectors. There is no doubt that this investment will gradually
be made, as the key regional players address the existing interstate tensions and hostilities that
impede investment in Afghanistan and the rest of the region.

Building Sister-City Relations

Moreover, in an effort to further solidify ties between Afghans and Indians, the Afghan Embassy
in Delhi has initiated the creation of sister-city relations between major Indian cities and states
and their Afghan counterparts. To date, the embassy has proposed the creation of relations
between Delhi and Kabul, Mumbai and Kandahar, Ajmer Sharif (Rajasthan) and Herat,
Hyderabad and Jalalabad, Ahmadabad (Gujrat) and Asadabad (Kunar), as well as the State of
Assam and the Province of Helmand.

As soon as these proposals are procedurally processed by both sides, the major cities of
Afghanistan and India will be connected through tourism, student and faculty exchange
programs, as well as private sector investment, which the embassy has been promoting through
its vigorous economic and cultural diplomacy outreach throughout India.

Ghani’s State Visit

As Afghan President Ashraf Ghani told his Indian counterpart Pranab Mukherjee during the
former’s April state visit to India, “We are two countries that are bound by a thousand ties and
millions of memories.” Ghani added, “The ties between our two countries are engraved in our
landscapes, from the haunting, empty frames where the giant Buddhas of Bamiyan once stood, to
the remnants of Hindu temples that stud the Afghan countryside, to the Sufi shrines and the
mosques and minarets, forming the cultural heritage of India.”

Against this backdrop of strong people-to-people and civilizational ties, Afghanistan presents a
clear economic opportunity for India and the region. Afghans are working to make their country
“the Asian roundabout, a key hub in the revival of the Silk Road.” Last April, Ghani spoke with
Prime Minister Narendra Modi and the Indian business community about his vision of
Afghanistan, and encouraged India to consider investing in Afghanistan’s highly profitable
markets.

The Afghan president even promised personal intervention to facilitate significant Indian
investment in Afghanistan, provided that Indian businesses consider moving in with major
investment plans. In a proactive step to facilitate Indian investment in Afghanistan, Ghani has
ordered the opening of a new consulate, either in Kolkata or Hyderabad. A feasibility study is
currently underway.

In this connection, Afghanistan’s Minister of Energy and Water and Minister of Rural
Rehabilitation and Development visited Delhi in August to participate in the Afghanistan-India
Renewable Energy Summit, hosted by the Federation of Indian Chambers of Commerce and
Industry (FICCI). The ministers discussed business opportunities in the renewable energy sector
in Afghanistan, and invited Indian businesses to take advantage of the chance to invest in a vast
unexplored market in this critical sector.
Also, appreciating India’s efforts to expand regional connectivity, Ghani invited India to join the
PATTA (Pakistan, Afghanistan, Tajikistan Trade and Transit Agreement), an invitation currently
under review. If agreement is reached, it would go a long way to enabling Afghanistan to play its
natural role as a land-bridge connecting South and Central Asia.

In the same vein, Ghani lauded India’s investment in the Chabahar Port project, and encouraged
its speedy implementation, which would ensure wider regional connectivity, increasing North-
South transit trade and investment through Iran and Afghanistan.

At the same time, Ghani welcomed India’s decision to provide support to the Habibia School in
Kabul over the next 10 years; contribute to the Afghan Red Crescent Society’s program to treat
Child Congenital Heart disease over the next five years; and offer assistance for a program of the
Indira Gandhi Institute of Child Health in Kabul over the same period.

The Afghan president also appreciated India’s decision to extend the 1,000 ICCR scholarships
per year scheme another five years until the academic year 2021-22. And both sides agreed to
sign in the coming months a number of commercial, consular, and mutual legal assistance MOUs
to further expand bilateral cooperation between Afghanistan and India. These range from an
extradition treaty to a agreement on visa-free entry for holders of diplomatic passports.

The Way Forward

Afghanistan and India have a full agenda of shared objectives to execute. The framework, within
which bilateral aid programs and projects should be implemented, is the Strategic Partnership
Agreement (SPA), which Afghanistan signed with India in 2011. Over the long run, the multi-
dimensional Indo-Afghan relationship will only grow, in line with the two nations’ historic ties
and converging interests, which they share with China and Russia.

Like Afghanistan, India, China, and Russia have been targets of terrorist attacks, and remain
concerned about the growing threats of terrorism, radicalism and criminality that primarily
destabilize Afghanistan but also undermine regional peace and stability. Afghanistan has of
course long been fighting the threat of terrorism. Its forces continue to wage a relentless
campaign that has found consistent institutional support outside of Afghanistan. Casualty
estimates vary, but about 92,000 innocent Afghans are believed to have been killed since 2001,
while nearly 100,000 others have been wounded. Just recently, the United Nations reported that
in the first six months of 2015, 5,000 Afghans were killed by terrorist attacks across Afghanistan.

The recent summits of the Shanghai Cooperation Organization (SCO) and BRICS in Ufa, Russia,
also discussed the intertwined security challenges of terrorism, radicalism, and criminality that
confront the entire region, with far-reaching implications for international peace and security. As
Ghani said in the two summits, Afghanistan occupies “a prominent place in the narrative and
activities of terrorist organization networks; they are betting on our failure and should we fail,
three of our neighbors, China, India, and Russia, out of the big countries, will be in harm’s way,
but also all our other neighbors, near and far.”
To avoid this scenario, especially in light of the rising presence of ISIS in Afghanistan, Ghani
called on the three key regional players to join in a “forceful and coherent action” against any
threats that undermine the security and stability of the region. He strongly recommended that the
SCO – which will include India and Pakistan as full members – adopt a comprehensive strategy
to overcome terrorism, since international actions have so far been “partial and fragmented,”
while terrorist networks such as ISIS and Al Qaeda have moved “with coherence, determination,
and decisiveness.”

M. Ashraf Haidari has recently served as the deputy chief of mission of the Afghan Embassy in
India. He was formerly Afghanistan’s deputy assistant national security adviser, as well as
chargé d’affaires and deputy chief of mission of the Afghan Embassy in the United States.