India, Afghanistan and Iran set to sign transit agreement

India, Afghanistan and Iran are close to signing a trilateral transit agreement. Shaida Mohammad Abdali, Ambassador of Afghanistan to India, said here on Monday that the draft agreement document was currently being studied by Iran before the formal agreement.

He was speaking at a meeting organised by MCCI.

“The draft agreement has already been okayed by the Afghanistan and Indian governments. Iran’s approval will pave the way for the formal accord on a transit route from Afghanistan to the Iranian port of Chabahar,” Abdali said.

This will provide an alternative transit route for goods to the one existing through Pakistan.

This will also serve as a precursor to other agreements for cross-border logistics links for goods including evacuation of mineral resources. India and Afghanistan are in negotiations for a road and rail link between central and northern part of Afghanistan and the Iranian port of Chabahar.

The Ambassador suggested that the agreement would remove much of the “technical” hurdles for operationalising the $10.8 billion iron and steel project at Hajigak in Bamian province of Afghanistan by a consortium of Indian steel makers.

The rail and road link projects as well as the Hajigak project have not been hanging fire for “security” issues, but technical hurdles regarding financing and legal infrastructure, he pointed out.

A group, which studied the proposed rail project, pegged its cost at $5 billion. India is understood to have extended development assistance worth around $2 billion for various reconstruction and rehabilitation projects in the past few years in Afghanistan.

In the case of Hajigak project, one hurdle has been crossed after passing of new Afghan mining law.

The bilateral trade between India and Iran, which stood at $683 million in 2013-14, is expected to grow exponentially if the logistics bottlenecks are removed, Abdali said.

Afghanistan may open a consular office in Kolkata. The Ambassador said that he had made the proposal in this regard to his government.

He has also come up with a proposal to accord Kolkata the ‘sister city’ status to northern Afghan town Mazar-e-Sharif. It is famous for shrines and Islamic and Hellenistic architecture.

The Ambassador will meet Chief Minister Mamata Banerjee on Tuesday and offer the ‘sister city’ proposal for Kolkata.

Abdali felt Kolkata provided good business opportunity to Afghanistan. “We have a consular office in Mumbai. I feel we also need to have one here,” he added. He also proposed links between Indian chambers of commerce and their counterparts in Afghanistan.