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Amid reports that the Trump administration is likely to adopt a tougher stance on Pakistan for its alleged role in the growing instability in Afghanistan, New Delhi and Kabul have started air cargo operations between the two countries. The move may be seen as an attempt to outflank Pakistan, which is Afghanistans largest trading partner and together with Iran is the principal conduit for its overseas trade.

On the occasion of the inaugural cargo flight, which carried Afghan exports worth $5 million to India, President Ashraf Ghani vowed to change Afghanistan to an exporter country. Here is an objective no one would disagree with. There is a close and reciprocal link between economic revival and political instability in Afghanistan. Years of infighting ravaged the Afghan economy. On the other hand, a feeble economy has thwarted efforts for peace and reconciliation and encouraged corruption as mighty warlords competed for meagre resources. It also reduced Afghanistan to a vassal state, serving the foreign policy objectives which are often mutually incompatible of the key regional and international players.

At present, the $18 billion Afghan economy one of the smallest and the poorest in the world runs almost entirely on assistance from international donors. The country also faces a persistently huge balance of payment problem, as exports (worth $521 million) lag far behind imports (worth $3.3 billion). The Afghans need to narrow the trade deficit and start looking inwards to keep the wheels of the economy moving. As a result, an overwhelming dependence on foreign capital inflows will continue to rob the country of whatever sovereignty it is left with. But this is a case of easier said than done. An economy in tatters that rests on only a handful of agro-based industries and works in the shadow of terrorism, is extremely difficult to shape up.

It is customary for the Afghan leadership to blame Pakistan for all their economic and political problems. Being a landlocked country, Afghanistan has remained dependent on Pakistan for its foreign trade. The access was first provided to it through the Afghan Transit Trade Agreement of 1965 and currently it is granted through the Afghanistan-Pakistan Transit Trade Agreement (APTTA). However, instead of cementing bilateral relations, transit trade has remained a source of friction between both countries.

There are at least three problems with Afghan transit trade. First, it is a conduit for smuggling. This is primarily because import tariffs in Afghanistan are much lower as there is no domestic industry worth mentioning to protect. The tariff gap between Pakistan and Afghanistan countries provides one of the strongest incentives for smuggling. Several products that are sent to Afghanistan eventually find their way back into Pakistan. This affects the local industry. Pakistan has responded by putting a few items on the negative list of transit trade and subjecting the merchandise and the carriers to greater checks than the Afghans would like.

Second, as in the case of India, political issues have cast a pall over Pakistans trade relations with Afghanistan as well. Both countries have incessantly accused each other of patronising anti-state elements. Whenever terrorists strike in Afghanistan, the people at the helm in Kabul invariably point fingers at Pakistan. By the same token, several incidents of terrorism taking place in Pakistan such as the December 2014 Army Public School tragedy in Peshawar have been attributed to militants residing in Afghanistan.

In recent months, the tense bilateral relations between Afghanistan and Pakistan have led to the closure of the Pak-Afghan borders at Torkham and Chaman on quite a few occasions including for two weeks between February and March. Even when the borders are open, heightened security measures tend to slow down the movement of traffic. The closure of the borders is seen by the Afghans as an attempt by Pakistan to squeeze them economically.

The third problem stems from the inability to allow Indian exports access to Afghanistan via the land route. The APTTA allows Afghan exports to India through the Wagah border. But it doesnt extend the same facility to the Indian exports destined to Afghanistan. Pakistan has itself restricted trade with India and even fewer Indian exports are allowed through Wagah.

New Delhi has tricked Kabul into believing that by not allowing Indian exports overland access to Afghanistan, Pakistan is hurting the Afghan economy. At present, the total Indo-Afghan trade amounts to $551 million which include exports worth $130 million from Afghanistan and $421 million from India. This is much lower than Pak-Afghan trade worth $1.57 billion (exports worth $1.34 billion from Pakistan and exports amounting to $227 million from Afghanistan).

Any attempt to open up trade with India will, by no means, tilt the balance of trade in Afghanistans favours as the Indians have much more to sell to the Afghans than the other way round. Rather it will drive up Indian exports to Afghanistan and may even exacerbate Afghanistans overall balance of payment situation. This will, in turn, shore up the countrys dependence on foreign assistance including that from New Delhi. As a result, the greater the volume of Indo-Afghan trade, the higher is likely to be the Afghanistans indebtedness to India.

By Indian standards, Afghanistan is a small market. If a purely economic logic is anything to go by, it should not hold much of an attraction for the Indians. But the economy has never been the mainspring of New Delhis overtures towards Kabul. What it has set upon itself and has already achieved a lot through is the strong commercial and political presence in the war-torn but strategically important country. Given the zero-sum game that New Delhi and Islamabad are engaged in, any gains made by India anywhere are seen by both countries as a loss for Pakistan and vice versa. As a result, the growing warmth in New Delhi-Kabul relations are perceived to be an affront to Pakistan.

Speaking in economic terms, Pakistan possibly losing out from stronger Indo-Afghan ties is not a question of mere perceptions. Afghanistan is among the largest export markets for us. It is also one of the few countries with which we run more than a billion-dollar trade surplus. In case Indian exports get overland transit to Afghanistan, they could displace a large chunk of exports from Pakistan and thereby result in the loss of an important market. In addition, Afghan trade is a source of substantial commercial activity in Balochistan and Khyber Pakhtunkhwa where economic opportunities are otherwise meagre.

In part, India has sought to get over the problem by helping build the Chabahar Port in south-east Iran and connecting infrastructure in Afghanistan and using it to export merchandise to Afghanistan and beyond that to Central Asia. Though it has been carried out on a much lower scale reflecting the relative economic strengths of the two countries the Indian investment in Chabahar has also been compared with that of China in Gwadar.

Iran is another country in the region which is on excellent terms with the people at the helm in Kabul for being on the same page on security-related matters. Its also one of the largest trading partners of Afghanistan. The coldness that in recent years has characterised Islamabad-Tehran relations for one reason or another has also served to bring Iran closer to India and Afghanistan. But can the Kabul-Tehran-New Delhi nexus help Afghanistan get out of the catch-22? The Afghans must try to answer this question.

The writer is a freelance countributor.

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Beyond Afghanistan's catch-22 - The News International