Global Trade and Customs Journal
Volume 17, Issue 1 (2022) pp. 2 – 9

https://doi.org/10.54648/gtcj2022001

Abstract

The horrific takeover of Afghanistan by the Taliban has been accompanied by the shutting down of the trade route with India. This action has put into serious jeopardy the bilateral trade between the two countries totaling USD 1.5 billion nurtured in the last two decades. The paper argues that despite Taliban’s unconstitutional takeover of the Afghan government and the absence of de jure recognition being conferred on it, international law obligations continue to bind it. In this regard, the paper argues that Taliban’s shutting down of the trade route is tantamount to imposing a trade embargo with India, which breaches several provisions of the three trade agreements that govern India-Afghanistan trade: India-Afghanistan Preferential Trade Agreement (PTA), South Asian Free Trade Area (SAFTA) agreement and the World Trade Organization (WTO) agreement. However, due to the weak dispute settlement mechanism in India-Afghanistan PTA and SAFTA, it will be difficult for India to hold the Taliban regime accountable. An important lesson for India is to reboot the dispute settlement mechanism in SAFTA moving away from a diplomacy-based system to a de-politicized and rule-based dispute settlement order.

Extract

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