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Connecting hope

Trilateral trade between Afghanistan- Pakistan-India

Manmohan Singh’s wish, to be able to have breakfast in Amritsar, lunch in Lahore and dinner in Kabul, may finally see the light of day now that Nawaz Sharif is re-elected as Pakistan’s leader. Back in 1999, as Prime Minister, Nawaz Sharif initiated an ambitious process of planning a super-express highway that would connect Afghanistan and India through Pakistan.

Although this plan made a rough progress during Musharraf’s and Zardari’s time in office, there is considerable hope for its revival now that Nawaz Sharif is making overtures toward India.

Integrating Afghanistan, India and Pakistan through infrastructure and trade will boost the region’s economy, but the process is and possibly will be clouded by a gamut of issues. Nawaz Sharif looks optimistic and willing to boost ties with India, but Pakistan’s words and actions have not always matched in the past, especially during Sharif’s rule.

Pakistan’s Army has always had a different agenda from its government when it comes to Afghanistan and India, and following the US withdrawal of troops next year, there is a possibility that Afghanistan may turn into India and Pakistan’s battleground, since both eye the strategic edge that Afghanistan offers.

Boosting trade

Therefore, in light of such sensitive issues, even though boosting trade ties would be the economic and political need of the hour, the development of a road network may face considerable challenges directly and indirectly. Nevertheless, the fact remains that India and Pakistan will have to work together in and for Afghanistan if they wish to truly see regional peace and security.

This would be the first time the three members of SAARC would enter into a trilateral agreement, although bilaterally agreements have been signed between India-Pakistan, Pakistan-Afghanistan and Afghanistan-India.

In 2010, Pakistan and Afghanistan signed Afghan-Pak Transit Trade Agreement (APTTA) to expand trade relations. The two states also formed a joint chamber of commerce. Construction for a railway track linking Afghanistan to Pakistan had been in the pipeline since 2005, which crystallized under this deal.

Critical provisions of the deal allow Afghanistan to carry goods to Pakistani ports like Gwadar as well as the Indian border of Wagah. Pakistan currently allows Afghanistan transit rights for its exports to India, but doesn’t allow goods to move from India to Afghanistan.

Because Afghanistan’s economy is one of the fastest growing economies in the world, trade between Pakistan and Afghanistan is expected to reach $5 billion by 2015. Being party to this agreement will bolster the Afghan economy by expanding its trade route and curbing rampant smuggling of substances like opium. The USA and NATO are also planning to revive the Silk Road which will help the local economies of Pakistan and Afghanistan by connecting South Asia with Central Asia and the Middle East.

However, trade between Pakistan and Afghanistan suffers some setbacks because land routes are not well developed due to difficult terrain. Even with historical passes like the Khyber Pass, Kurram Pass and Kojak Pass, the road linking is inadequate.

In addition, the APTTA was intended to improve trade between the two countries but Pakistan often causes problems for Afghanistan trade, especially since the 2011 NATO attack in Pakistan.

The plan to extend the APTTA to Tajikistan to establish a North-South Trade Corridor was disrupted by Afghanistan in protest to Pakistan’s bullying. Relying on the Pakistani sea ports means the Afghan’s are left vulnerable to political disputes between Pakistan and USA. Pakistan has closed its border with Afghanistan at least twice in the last few years, disrupting US military supplies, aid and routine trade.

Afghanistan is keen to export its goods like dry fruits, premium fruits like pomegranate, saffron, textiles and carpets to India and other countries. For this, Afghanistan is looking at its other neighbor, Iran. It hopes that an agreement with Iran to use its ports will help boost exports to Europe and India and reduce its dependence on Pakistan’s ports for trade. This could mean a huge blow to the APTTA agreement.

Strategic importance

Apart from its attractive export market, Afghanistan holds strategic importance for India as it seeks friendly allies in the neighborhood. It is also a gateway to energy rich Central Asian states such as Turkmenistan and Kazakhstan. Afghanistan, on the other hand, looks to India as a potential counterweight in its relationship with Pakistan.

India is the fifth largest donor to Afghanistan. In 2011, India and Afghanistan signed an Agreement on Strategic Partnership (ASP). While bilateral trade has been on the rise ($300 million by 2010), India has smartly used its soft power to improve its image and strategic ties with Afghanistan. India is involved in many development projects in Afghanistan like building schools and hospitals. It has also constructed Afghanistan’s new parliament and is reported to have provided planes for Ariana, Afghanistan’s national airline.

Many Indian companies are heavily investing in sectors such as agriculture, manufacturing, telecommunications and mining. In addition, according to Indian officials there are currently about four thousand Indian workers and security personnel; working on different relief and reconstruction projects in Afghanistan. Following increased threats to Indians, India has sent mountain-trained paramilitary forces apart from the five hundred police deployed there already. It is also training Afghan police officers and military men in its own defense colleges.

But its most important achievement comes with the construction of a 220 kilometer road between the cities of Zaranj and Delaram in 2009. This road managed to connect the main Herath-Kandahar highway with the existing routes that lead to the Iranian ports of Chabahar.

Similarly, to facilitate the access of Afghanistan’s estimated $1 trillion market of minerals and raw materials, Delhi is planning to build a rail link from Hajigak, a mineral rich area in Bamyan province through Zaranj and onward to Chabahar. In 2011 Kabul granted an Indian consortium mining rights to one of the region’s largest iron-ore mines. India is also undertaking similar projects in Iran as complimentary to its strategic efforts in Afghanistan.

India’s assistance to building Afghanistan’s infrastructure can also be seen in light of its energy needs. India has been pursuing better relations with Central Asian states for energy cooperation. It gave a $17 million grant for the modernization of a hydropower plant in Tajikistan, and has signed a MoU with Turkmenistan for a natural gas pipeline that will pass through Afghanistan and Pakistan, though with the recent LoC tensions Pakistan has refused to participate in talks
with India on the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline.


However, as prospects of trade provide a ripe situation for integrated regional trade, regional conflicts and power struggles are a constant damper. It is no surprise that Pakistan sees India’s growing influence in Afghanistan as a threat.  India, on the other hand, will continue seeking a more active role in the region. Conflicting views will thus hamper the prospects of such a trade route; irrespective of its necessity or attractiveness.

Tensions between the nuclear-armed neighbors in Afghanistan are not new. During Afghanistan’s civil war in the 1990’s, India supported the Northern Alliance by aligning with rebels who opposed Islamic extremism and Pakistan backed the group that eventually became Taliban.

Pakistan supported the Taliban to continue to maintain influence in Afghanistan and expand its geographic safety zone in the event of a conflict with India. However, after the US led invasion in 2001, the newly installed transitional government of Hamid Karzai allied itself with India, which was an unwelcomed development in Islamabad who feared being sandwiched between India and an Indian ally.

Moreover, Kabul’s continuous refusal to recognize the Durand Line as an international border further complicates this picture. Controlling this porous border is the central issue to their relationship. Their long-standing border dispute is due to tribal allegiances that have never recognized the century-old frontier.

After India opened consulates in Herat, Mazar-e-Sharif, Jalalabad, and Kandahar, Pakistan accused the Indians of using these consulates as cover for Indian intelligence agencies to run covert operations against Pakistan by fomenting separatism in Pakistan’s Baluchistan province.

Their fear of encirclement was further increased when India opened its first military air base in Tajikistan. It was a move towards protecting its energy interests in the region and safe transport of men and material to and from Afghanistan. Pakistan is also keen on benefitting from the Central Asian energy resources to meet its increasing energy requirement. Indian officials also blame Pakistan’s military intelligence agency, the ISI for supporting the Taliban for attacks on Indian personnel and material in Afghanistan.

Therefore, what is required for the trilateral trade route to be successful is an overall transformation of Pakistan-Afghanistan and India-Pakistan ties. In the overall context of improved regional relations, not only would Pakistani confidence be enhanced, they would find a lucrative economic alternative to Taliban for furthering its interests in the region. Therefore, Pakistan’s cooperation in counterterrorism is vital. For its part, Afghanistan must reassert a neutral policy of pursuing strong relations with both India and Pakistan. Pakistan and India should participate in confidence building measures.

Regional cooperation on trade is the key to security in the region. If Pakistan removed restrictions on Afghanistan’s and India’s goods passing through and from Pakistan, the three countries could make most out of their advantageous geographical positioning at the crossroads between Central, South and Western Asia.

However, what happens post 2014 is a major cause of concern for the fate of the trade corridor. If the Afghan government loses control of the country, both India and Pakistan stand to lose from the ensuing chaos, with insurgents crossing over the porous border and emboldening the Pakistani Taliban and regional terrorist groups making further inroads into India.

What India and Pakistan would need in Afghanistan is an ongoing relationship of transparency. If they are able to do so, there rivalry in Afghanistan will become more subtle.