Recently, Adani port banned import-export from Afghanistan, Iran, and Pakistan. Currently, they are not accepting any consignment from or to these three countries.
The containers in cargo had been declared as the consignment of semi-processed talcum powder on papers. They are purely exported for industrial purposes from the main original destination of Afghanistan and shipped from Bandar Abbas port in Iran to Mundra port in the western region of Gujarat.
The officials said that later on, after the forensic tests were done, the reports confirmed the presence of heroin disguised as powder.
Well, this is something which is going to have an impact on the concerned countries. Let us try and understand these implications in detail.
If we talk about India’s trade, about 95% of India’s trade is done through maritime ports. India is blessed with a long coastal line which makes it easy, favorable, and economical while doing trade at the international level.
Why trade through seaports?
Since India has a long coastline, it becomes very economical when it comes to trade with the different countries, especially with the countries located on the western side.
Recently, tension between India-Pakistan has grown drastically, and Pakistan’s Imran Khan government has officially declared that they will have no other trade relations with India except for medicines and pharmaceuticals products.
Another reason is the border dispute India is having with China. The trade through roads to the ASEAN countries is limited because of extreme weather in these regions, Chinese army interferences, and not having proper road infrastructure. Trade route through Myanmar to the ASEAN countries is there, but it is limited. So, therefore, land route trade is comparatively less than the trade done through maritime.
Apart from the border disputes, trade through the sea is more convenient, easy, and more economical in terms of money. Also, the time element should not be ignored.
Reason for the Ban and Adani port’s stand
Recently, India’s top anti-smuggling agency, Directorate of Revenue Intelligence seized Rs 21000 crores worth drugs from Mundra port in western Gujarat, on 15th September.
On September 21st, the company through an official statement made it clear that “APSEZ is a port operator that provides services to shipping lines. No port operators across the country can examine a container. Their role is limited to running the port. Company has no policing authority over the containers that pass through the terminals in Mundra or any port of Adani group.”
However, it is hard to digest the fact that such a huge consignment got caught and the port authorities do not even know a piece of single factual information about it apart from knowing the originator’s names and the destination. This even makes the port authorities and entire management of the Adani group look suspicious. Many questions have arisen, questioning even the role of investigating agencies.
Adani is the country’s largest commercial port operator, and is present across 13 domestic ports in seven states that include Gujarat, Maharashtra, Kerala, Tamil Nadu, and Orissa.
The special court of narcotic drugs and psychotropic substances in Gujarat issued an order on 26th September, thereby expressing the need for further investigation by the DRI, regarding some crucial questions arising out of the incident like what is the role of authority and officers of Mundra port, as the consignment was registered to import and Mundra port was been the destination.
The second question that arises is how the management, authority, and officers of Mundra port were completely unaware of the facts related to the imported consignment with such a huge amount of drugs. This further raises questions on the involvement of them in it and whether they were gaining any sort of benefits from the import of such substances.
On 6th October, the Ministry of Home Affairs transferred the case for further investigation from DRI to NIA, that is, the National Investigation Agency.
For now, the Adani port has refused to accept the consignments to or from countries which include Iran, Pakistan, and Afghanistan, to keep themselves away from further controversies and to save the company’s image. But certain questions which are quite logical and obvious are yet to be answered by the Adani port, especially its role in this entire event, and its impact as Mundra is one of the largest commercial ports of India.
Answering these questions has become even more important because the move of not accepting consignment from or to these countries will have an impact on the trade volume of India. Trading from other ports will increase the cost even more. Adani port is strategically very important for India as major trading with the western side countries is done through Adani port. This majorly helps in the cost reduction, thereby maintaining a good balance in the trade of the country. Also, it’s going to be very interesting to see the Adani groups’ reaction. Their stand in this entire incident does matter a lot.
It is also going to have an impact worldwide on the relations with Iran. It will be quite interesting to witness how the government of India will react and negotiate with the government of Iran, because countries that are in favor and open to the international market trend to grow faster, innovate, improve production capacity, improve the living standard of its people and increase the per capita income. Also, open trade helps the lower-income groups to get commodities at an affordable rate.
Whenever a dispute related to trade arises at an international level with any country,it always has multiple impacts, especially on the economy and common people of the involved countries. If not solved wisely, it can have many adverse impacts on the economy. Every element is important and should be considered wisely. The trade dispute mechanism should be strong enough from its side to make reasonable as well as fair negotiations keeping in mind what elements can positively affect our economy and what elements can have negative impacts on our economy. This is something our government should be doing as soon as possible.
Edited by Anupama Roy