Afghan eyes Iran deal to boost trade to Europe, India

KABUL Sun Jul 28, 2013 8:08am EDT

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KABUL (Reuters) - Afghanistan hopes an agreement with Iran to use one of its ports will help boost exports to Europe and India and reduce its dependence on neighboring Pakistan's ports for trade.

Iran will allow land-locked Afghanistan to use the port to export goods like fruit and carpets to India and other countries, according to the spokesman for Afghanistan's Ministry of Commerce and Industries.

"We want to export to central Asia and Europe, India wants to use the port to send goods to Afghanistan," Wahidullah Ghazikhel told Reuters.

Afghanistan currently relies on the port of Karachi in Pakistan for the bulk of its sea exports.

But that leaves traders vulnerable to political disputes between the United States and Pakistan, which has closed its border with Afghanistan at least twice over recent years, cutting U.S. military supplies to Afghanistan, as well as routine trade.

"If the Pakistani government's relationship with the United States goes bad, this impacts our traders," Ghazikhel said.

In the most recent disruption on the Afghan-Pakistani border, private transport companies were banned from moving Afghan goods to Karachi, delaying containers for about three months.

Not only did the contents, including milk and eggs, spoil, but companies were also charged a total of $10 million for renting storage space for their delayed containers, he said.

"We are very interested in exporting to European countries and working on other ways (that avoid Pakistan's port)," the spokesman said.

Millions of dollars have been invested in companies that aim to export "premium" fruit such as pomegranate, prized by the health-conscious in Europe, Asia and the Middle East.

Afghanistan also exports many other types of fresh and dried fruit, saffron and carpets. But although it sees agriculture as a driving force in its economy, Afghanistan continues to rely on imports for most of its food.

(Reporting by Jessica Donati)

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