India and Afghanistan are demonstrating a strong commitment to strengthening their trade and economic cooperation, resolving previous obstacles and forging ahead with new initiatives. Recent discussions and agreements signal a revitalized effort to boost bilateral trade beyond the current $1 billion mark and foster stronger economic ties.

Afghanistan's Commerce and Industry Minister, Alhaj Nooruddin Azizi, recently visited India to discuss ways to enhance bilateral economic cooperation and reactivate historic relations in trade and investment. Azizi's visit, the first by an Afghan minister to the India Trade Promotion Organisation (ITPO) since 2021, highlights the importance both countries place on strengthening their economic partnership. Escalating tensions between Afghanistan and Pakistan, including border closures that have disrupted exports, have further incentivized Afghanistan to diversify its trade relationships, with India emerging as a key partner.

Several key decisions and proposals have emerged from these discussions:

• Joint Chamber of Commerce: India and Afghanistan will establish a joint chamber of commerce to widen business engagement.
• Tariff Reduction: Both countries plan to mutually reduce tariffs to support trade expansion.
• Trade Fairs: Annual trade fairs will be organized to provide industries with direct access to markets in both countries.
• Zero FSSAI Fee: The Food Safety and Standards Authority of India (FSSAI) fee on Afghan food items will be reduced to zero, easing the entry of agricultural and processed goods into India.
• Increased Medical Visas: India will issue more visas for Afghan nationals seeking medical treatment.
• Healthcare Cooperation: Afghanistan has invited a major Indian hospital chain to open a branch in Afghanistan, with India set to send technicians and experts as part of the cooperation.
• Banking Coordination: Banks from both countries will maintain close contact to address minor issues in the banking sector and promote cooperation.
• Commercial Attachés: Both India and Afghanistan have decided to appoint dedicated commercial attachés in each other's capitals to revitalize bilateral trade.
• Air Cargo Services: Air cargo services between Kabul and Delhi, as well as Kabul and Amritsar, will commence soon.

During the meetings, ways to increase textile trade were specifically discussed, with Afghanistan expressing interest in leveraging India's expertise as the world's second-largest cotton producer. India is already a significant supplier of textiles and apparel to Afghanistan, exporting USD 68.7 million in 2024. Discussions also covered technical support and training for Afghan cotton farmers, facilitation of shipments and visas, and closer engagement between industry bodies of both countries. The Ministry of Textiles encouraged Afghan participation in Bharat Tex 2026.

Afghanistan's Minister of Commerce has actively encouraged Indian private companies to consider investments and business-to-business collaborations, stating that Afghanistan is "a land of opportunity for business". He assured that foreign firms are operating safely in Afghanistan and that recent visits by Indian companies reflect confidence in the security situation. Afghanistan is offering incentives such as a 1% tariff on raw materials and machinery, free land allocations, reliable power supply, and proposed five-year tax exemptions for new industries, especially those established by returning Afghan refugees.