Iran Supplies Nearly Half of Afghanistan’s Market Demand

EghtesadOnline: Iran accounts for nearly half of Afghanistan's market demand, according to Iran’s commercial attaché to the neighboring country, Mohammad Mehdi Javanmard-Qassab.

News ID: ۷۵۱۱۹۰

05 October 2020

About $3-4 billion of Afghanistan’s total annual imports worth $6-7 billion are from Iran, he added.

“The depreciation of Iranian currency has paved the way for an increase in exports … Afghanistan has huge capacity and demand in the field of technical and engineering services. This provides us with ample opportunity for the export of these services and the transfer of our technical knowhow in different fields to Afghan businesses,” Javanmard-Qassab was quoted as saying by Fars News Agency.

To achieve this objective, the official added, Iran held a technical and engineering exhibition in September.

The First Exhibition of Iran’s Technical and Engineering Services in Water, Electricity and Energy Sectors was held in Kabul, alongside the first edition of Urban Services, Transportation, Traffic and Related Machinery Exhibition from Sept. 22 to 24.

“Iran dispatched its biggest trade delegation over the past 25 years to Afghanistan to attend this exhibition for negotiating Iran’s capabilities and Afghanistan’s market capacities,” the official said.

Twenty-one Iranian companies in the urban services sector and 54 companies in technical and engineering services sector participated in the exhibitions, Iran’s Embassy in the Afghan capital said in an announcement.

Javanmard-Qassab noted that although Iran aims to increase exports to Afghanistan, there are many infrastructural handicaps in the way.

“Facilities at the common border checkpoints are not sufficient to accommodate higher trade volumes. This needs to be addressed by officials of the two sides … The two countries have congenial cooperation that has strengthened ties between Iranian and Afghan merchants and businesspeople. Therefore, a boost in trade is not far-fetched, if the proper infrastructure is prepared.

Latest data released by the Customs Administration of Iran show 2.6 million tons worth $871 million were exported from Iran to Afghanistan during the first five months of the current fiscal year (July 22-Aug. 21), accounting for 8% of Iran's total exports to the neighboring country during the period.

All Border Gates Open for Trade

There are three main border gates between Iran and Afghanistan, which are open for trade.

Milak in southeastern Sistan-Baluchestan Province is the main trade corridor between the two countries.

The closing hours of Milak was extended on Sept. 16 from 7 p.m. to 10 p.m. to speed up the flow of commercial traffic on Iran’s side of the border, ILNA reported.

The agreement was reached after a videoconference between Iranian and Afghan heads of customs administrations and an in-person meeting between local officials of Sistan-Baluchestan and Afghanistan’s Nimruz Province.

Wheat, sugar, fabrics, food, dairy products and vegetables are the main items exported by Iran to Afghanistan via Milak border crossing.

Besides Milak, Iran and Afghanistan have two other border crossings for trade, namely Dogharoun in Khorasan Razavi Province’s border city of Taybad, in addition to Mahiroud in South Khorasan Province.

About $1.16 billion worth of goods were exported to Afghanistan through Dogharoun Special Economic Zone during the first half of the current Iranian year (started March 20).

“The value of exported goods has risen by 33%, compared with the same period of last year,” the head of Dogharoun Special Economic Zone told IRNA.

Mohammad Rostami added that Afghanistan exported $2.57 million worth of goods to Iran during the same period.

He noted that 50% of Iranian exports to Afghanistan through Dogharoun go to Herat, which is the second biggest market in the country.

“The 30-million-person market of Afghanistan welcomes Iranian goods. Construction materials, fresh and dried fruits, and food are among the most popular goods in Afghanistan and construction stones, oilseeds and used batteries are among the main goods exported to Iran from Afghanistan,” he said.

Dogharoun border customs office is 100 years old. The border crossing also sees the transit of goods that originate from Pakistan, Persian Gulf states countries and India.

Rail Connection by Autumn's End

According to Iran's Deputy Minister of Roads and Urban Development Kheirollah Khademi, the Khaf-Herat railroad station will be completed by the end of autumn.

Some 80 kilometers of the 220-kilometer-long railroad are in Iran and the remaining 140 kilometers stretch from the common border to the Afghan city of Herat.

"Khaf-Herat railroad stations are under construction at zero points of common borderlines and will be complete in less than three months," Khademi was quoted as saying by Fars News Agency.

"Khaf-Herat railroad is one of the largest projects we are working to put into operation," he added.

Khaf-Herat is part of the Iran-Afghanistan rail corridor. The project, which started in the fiscal 2007-8, connects Iran’s eastern city of Khaf to Afghanistan’s western city of Ghoryan.

“The project has progressed by 92% so far in the Afghan territory. As for the Iranian part, track laying and welding of the route is underway,” Abbas Khatabi, the deputy head of Construction and Development of Transportation Infrastructure Company affiliated with the Ministry of Roads and Urban Development said in July.

Besides the 80 kilometers located within its borders, Iran has committed to the construction of 60 kilometers of the Afghan part of this rail project.

When completed, the rail route will be connected to the Central Asian and Chinese rail networks. This is estimated to considerably increase the volume of transit as well as passenger transportation in the region.

The corridor in its entirety, from Herat, Afghanistan’s third-largest city, to Khwaf, in Iran’s northeastern Khorasan Razavi Province, will connect Iranian mines to those of Afghanistan, while also connecting Afghan reserves to the international waters in southern Iran.

This will be Afghanistan’s first railroad link to Iran and the country’s only link to the Persian Gulf and Sea of Oman.

“Upon completion, the railroad will be used for transportation of both passengers and cargo. However, exploiting its cargo capabilities is a priority for both governments,” Reza Ahmadi with Iran’s Roads Ministry has been quoted as saying by News.mrud.ir.

Ahmadi believes that the railroad will have the capacity of transporting 27 million tons of cargo a year.

Another deputy roads minister, Amir Mahmoud Ghaffari, has been quoted as saying that the railroad will be inaugurated by the presidents of Iran and Afghanistan, in the presence of other top officials of the two countries.

He underlined the strategic significance of this railroad both in the region and beyond.

“The railroad is important both for internal transportation and passenger transport,” Ghaffari added, noting that it is very important in terms of connecting Afghanistan to free waters and even European countries.

“On the other hand, the transportation and transit of cargo and goods to Afghanistan and then to East Asian countries are considered very important for Iran,” he concluded.