India’s trade with Nepal and Afghanistan: One-off trade deficit with Afghanistan in 2023

Afghanistan

• Bilateral Trade Trends: Imports increased from USD 509. 49 million in 2020–21 to USD 642. 29 million in 2023–24 (a record); exports from India to Afghanistan declined from USD 825. 78 million in 2020–21 to USD 355. 45 million in 2023–24.
• Before something like this, India-Afghanistan trade deficit stood at USD 0. 73 million in the year 2000–01.
• Imports: Agricultural goods like including figs, asafoetida, raisins, apples, pomegranates, walnuts, onions, garlic, and saffron.
• Exports: Clothing, vaccines, medications, and soybean meal.
• Key products: Afghanistan was the largest supplier of garlic, raisins, and asafoetida in 2023–2024.
• After Iran and Turkey, Afghanistan became India's third-largest supplier of apples in 2023–2024, surpassing both Italy and the United States.

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Nepal

• India imports nearly USD 3 billion soybean oil in April-November 2024, up 19% from USD 2. 5 billion in 2023
• Rule of Origin: 98% of Nepal’s crude edible oil is imported, refined and exported to India, suggesting exploitation of duty structure
• Under the 2009 Nepal-India Treaty of Trade, Nepal enjoys a 30 per cent tariff advantage over other exporters in terms of duty-free exports to India.

India’s trade with Afghanistan increased in imports but contracted sharply in exports. Major import items were agricultural products while exports included clothing, medicines and vaccines. Afghanistan became a major supplier of apples to India. India’s trade with Nepal increased in soybean oil imports, but there was concern about duty-free trade exploitation arising from the re-export of refined crude edible oil under the bilateral trade agreement.