Russia is trying to increase trade ties and involve Afghanistan into multilateral organizations

Afghanistan’s role is critical for Russia in terms of security and regional infrastructure. The country lies at a strategic geographic location bordering three other Central Asian nations, (Tajikistan, Uzbekistan, and Turkmenistan) in addition to borders with Iran, Pakistan and a corridor with China.

Afghanistan therefore strives to serve as a connectivity hub for north-south as well as east-west trade and infrastructure lines. However, for the moment, the political, security and economic challenges Afghanistan is facing remain almost insurmountable, but the country is increasingly attractive as a Central Asia hub and has the potential to help link Central Asia to South Asia as a transit hub via Pakistan.

Russia is trying to increase trade ties and also involve Afghanistan into multilateral organizations where Moscow has a leading position. For instance, Moscow believes that Kabul should be involved in the Shanghai Cooperation Organization (SCO), which potentially could ensure the implementation of transport and energy projects in the region. It already has the status of an observer nation to the SCO.

Though Russia regards the situation in and around Afghanistan as unstable, overall, Moscow considers it this partially as a necessary positive in that the United States military withdrew from Afghanistan in 2021. It minimizes the presence of non-regional actors and increases the chances for projecting Russia’s economic and political influence.

Moscow is interested in Afghanistan because of potential infrastructure projects. One of such grand enterprises is the TAPI (Turkmenistan-Afghanistan-Pakistan-India) gas pipeline which Russia has recently said it does not rule out the possibility of joining. Yet Moscow remains concerned because of unresolved issues related to the security of the pipeline on Afghan soil.

Russia’s trade ties with Afghanistan could arguably be among the most limited Russia has in Eurasia. Yet even here significant changes are seen possibly as a result of the Western sanctions imposed on Russia and the latter’s re-focusing of trade eastward. For instance, in 2021, Russia’s trade with Afghanistan amounted to US$86.6 million, a decrease of 44.86% when compared to 2020.

Trade ties between Russia and Afghanistan also decreased in the second half of 2021 when the US withdrew from the country paving the way for the Taliban takeover. Bilateral commerce however rebounded in the course of 2022 and the talks on Russian investments into Afghanistan intensified. In mid-2022 it was reported that the annual trade turnover between Kabul and Moscow was on track to increase to US$170 million. As of article (July 2023) the official date which would cover the entire period of 2022 remain unavailable.

However, there are signs of progress. In January 2023 the head of the Foreign Ministry in Afghanistan’s interim government, formed by the Taliban movement, Amir Khan Muttaqi, at a meeting with the Russian president’s special representative for Afghanistan, Zamir Kabulov, asked Moscow to work out ways to boost bilateral trade. This has extended to an Afghani presence at the main Russian trade and investment forums, with Afghani delegations present at both SPIEF and the FEEF in Vladivostok.

For years Russia’s major exports to Afghanistan largely consisted of food products and agricultural raw materials, wood and pulp and paper products, mineral products, chemical industry products, machinery, equipment and vehicles, metals and various metal products.

Afghanistan exported to Russia food products and agricultural raw materials, edible fruits and nuts, citrus fruit and melon peels, boilers, limited amount of equipment and mechanical devices, oilseeds and fruits, and medicinal plants. The Afghan Chamber of Commerce and Investment said at the beginning of this year that the Russian market was becoming more attractive for Afghan products as supply chains open up through countries such as Iran and Turkmenistan. From these countries, Afghan products can access Russia via their Caspian Sea Ports, while Russian products can travel in the opposite direction.

In the late 2010s, Moscow sold Kabul almost exclusively vegetable oil (which, according to data of the time, accounted for 44% of all Russian exports to Afghanistan), oil products (20%) and timber (17%). In return, Afghanistan exported to Russia, only one type of product – fruits (88%), and in very small numbers. In this context, in 2020, Afghanistan exported to Russia US$3 million worth of fruits, which is seventy times less than the neighbouring Uzbekistan achieves in its fruit exports to Russia.