NEW DELHI: Afghanistan will offer a five-year tax exemption for new domestic industries and a 1% import duty on raw materials and machinery, Afghan commerce minister Nooruddin Azizi said on Friday, while vowing to deepen economic ties with India.
He identified cement, rice, textiles, pharmaceuticals, mining, and energy as priority sectors for a country that has been in the griup of strife for years.
"To support domestic industry, we are giving a preferential 1% tariff on raw materials and machinery and a five-year tax exemption for new industries that are set up in Afghanistan," Azizi said at a PHD Chamber of Commerce and Industry (PHDCCI) event in Delhi and stated that Afghanistan created a "flexible and enabling" business environment and wanted Indian companies to invest in large numbers across sectors.
On production incentives, he said "We have economic oriented policies...So if the production increases by 20% we increase govt support, which would keep on increasing as production increases."
At the event as well, joint secretary in the ministry of external affaris M Prakash Anand said that both sides agreed to post trade attaches in their embassies to boost trade and revive the joint working groups on trade, commerce, and investment. He also mentioned that air corridors on the Kabul to Delhi and Kabul to Amritsar routes were activated and cargo flights on these sectors would start soon.
Azizi also spoke on several logistical hurdles Afghanistan faces, including the border closures with Pakistan, blocked transit routes via Chabahar, and frozen foreign reserves worth $9.3 billion which were blocked by the US after Taliban took over Afghanistan. "Americans block our funds, they have frozen $9 billion and block our trade routes. Pakistan blocks one side. What are we supposed to do?" he said, asking India to help ensure the trade route from Chabahar Port remained functional so that the trade remained commercially viable.
He added that Afghanistan was willing to offer financial discounts and invest alongside India and Iran to speed up work . "We are here for one purpose - to find the lowest-cost route," he said, "If there are ships needed, we will support it. If transport companies are needed, we will support it. If logistics need infrastructure, we will support it. We also invite the private sector to invest with us."
Azizi said the current $1 billion in trade between India and Afghanistan was "far below potential" and mentioned that Afghanistan's raw materials, dry fruits, carpets, and minerals offer strong opportunities for Indian buyers while Indian firms export rice, sugar, medicines, and garments. "Any trader who comes with a plan, we will assess it and we will provide all the possible facilities," he said.
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