One of the key thrusts during the India visits of Afghan Foreign Minister Amir Khan Muttaqi (October 2025) and that of Commerce and Industry Minister Alhaj Nooruddin Azizi (November 19-25, 2025) to India was giving a boost to bilateral economic relations between India and Afghanistan. Both the senior Afghan officials—apart from meeting with senior Indian officials—also held interactions with Indian businesses. Afghanistan’s Commerce and Industry Minister specifically listed out some of the incentives being provided by the Taliban Administration to investors. He also listed some specific sectors—especially mining and information and technology—where the Afghan economy has immense potential.
Trade between India and Afghanistan is currently estimated at over $1 billion. In the aftermath of tensions between India and Pakistan in May 2025 and more recently strains between Afghanistan and Pakistan, trade between India and Afghanistan via the Attari (India)-Wagah (Pakistan) land crossing seems unlikely. Trade between Afghanistan and Pakistan via land has also been stalled since October 2025, and Alhaj Nooruddin Azizi unequivocally stated that Afghanistan was seeking to diversify economic linkages.
During the India visit of the Afghan Foreign Minister—in October 2025—India had announced that it would be upgrading the status of the ‘technical mission’ in Kabul to an embassy. Several important decisions were announced during Azizi’s recent visit, with a specific focus on giving a boost to bilateral trade. The first was the resumption of the air freight corridor between both countries (linking Kabul-Delhi and Amritsar-Kabul). The second important decision was the appointment of commercial attachés in both countries. According to the Ministry of External Affairs (India), both sides also agreed to set up a ‘joint chamber of commerce and industry.’
Apart from air connectivity, both countries have also been seeking to strengthen ties via the Chabahar Port (Iran). The Afghan Commerce and Industry Minister called for expansion of the port. Said Azizi:
‘…problems have escalated with our neighboring country, specifically Pakistan, as they have stopped Afghan transit and trade through Karachi…We are now working to create new routes, including the Chabahar route, and have already begun groundwork.’
He did flag the fact that there were several logistical issues that needed to be addressed for bolstering trade relations.
The importance of the Chabahar Port in the context of regional connectivity
India, Afghanistan, and Iran had signed a trilateral agreement for enhancing regional connectivity via Chabahar Port (Iran) in May 2016. India has been managing the Shahidi Behesti terminal of the Chabahar Port since 2018; in 2024 it signed a 10-year agreement for management and development of the Shahidi Behesti terminal. According to the agreement signed between India Port Global Limited (IPGL) and the Ports and Maritime Organization of Iran, India would develop the port for a period of 10 years. India also made an investment commitment of $370 million for the development of the terminal. Apart from regional connectivity, Chabahar Port is also important in the context of India’s linkages to Russia and beyond. While speaking at the Shanghai Cooperation Organisation (SCO) Summit in September 2025, Indian PM Narendra Modi, while referring to India’s emphasis on strengthening connectivity, had said:
‘That is why we are advancing projects like Chabahar and the International North-South Transport Corridor, which will deepen links to Afghanistan and Central Asia.’
India has been sending relief consignments to Afghanistan via Chabahar—the most recent instance being humanitarian aid sent to Afghanistan in the aftermath of the devastating earthquake that rocked Afghanistan in September 2025. For India, the Chabahar Port has been important since it has been able to circumvent Pakistan, which has refused to provide land access. The project has become even more important in the aftermath of tensions between Afghanistan and Pakistan.
While Chabahar has immense potential, the project has been impacted by strained US-Iran ties. While the earlier Trump administration had provided India a sanctions waiver, more recently in October 2025, the waiver had been extended by 6 months. India would be hoping for an upswing in ties between Iran and the US, since there will be less uncertainty regarding the project.
Conclusion
In conclusion, India-Afghan economic ties have immense potential. Afghanistan has immense potential in certain sectors, which India can seek to tap. As mentioned earlier, some important roadblocks need to be addressed. The Chabahar Port, along with air connectivity between both countries, will be an important factor in giving a fillip to India-Afghanistan trade.
