Economy, Business And Markets

Chabahar Offers Huge Customs Discounts to Afghan Traders

Chabahar is India’s primary gateway to landlocked Afghanistan by circumventing Pakistan.
Chabahar is India’s primary gateway to landlocked Afghanistan by circumventing Pakistan.

The Iranian government is offering huge discounts on customs duties at Chabahar Port to attract more Afghan traders.

Afghan news agency Wadsam also 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.

Afghan traders can also take advantage of warehouse facilities at the strategic Iranian port, which is India's primary gateway to landlocked Afghanistan by circumventing Pakistan.

Tehran, New Delhi and Kabul signed a trilateral agreement to develop Chabahar in Tehran in May 2016, when Indian Prime Minister Narendra Modi and Afghan President Ashraf Ghani paid a state visit to Iran.

The deal stipulates the development and operation of two terminals and three berths at the port with cargo handling capacities for 10 years.

Based on the agreement, Iran is to provide land in Chabahar Special Economic Zone to Indian companies for setting up petrochemical, fertilizer and other gas-based industries.

India has also agreed to build a 500-km railroad from Chabahar to Zahedan, the provincial capital of Sistan-Baluchestan, close to the Afghan border. India’s state-owned IRCON has agreed to build a rail route at a cost of $1.6 billion as part of the transit corridor to Afghanistan.

After connecting Chabahar to Zahedan, the railroad will be linked to Zaranj in Afghanistan. Hence, when the Afghan cargo arrives in Zahedan, it can be transported by a 1,380-km railroad to Chabahar and then shipped to India.

A review of trade between Iran and Afghanistan over the past decade shows the neighboring country has mainly been an importer of Iranian goods.

Iran's exports to Afghanistan have been on a general uptrend since the fiscal 2005-6, topping at $3 billion in 2012-13. Exports decreased slightly in 2013-14 and the following year, but bounced back to its peak last year (March 2016-17).

Afghanistan's exports to Iran have been as little as a dozen million dollars on average over the years. The exports peaked at $32 million in the fiscal 2013-14.

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