Trade Relations Between Afghanistan and Pakistan Plummet by 95% Amidst Ongoing Tensions

The volume of trade between Afghanistan and Pakistan has plummeted by 95% due to political tensions and border closures, now hitting $358 million.

Significant Decline in Trade Volume Between the Two Countries

The deteriorating relations between Afghanistan’s interim government and Islamabad have led to an unprecedented decline in trade between the two nations. Mohammad Younus Momand, Deputy Head of the Afghan section in the Joint Chamber of Commerce and Industries, stated that economic exchanges between Kabul and Islamabad have nearly come to a complete halt, with a reported 95% reduction.

According to his remarks, the transit of Afghan goods through Pakistan has ceased, while the export of Pakistani goods to Central Asian countries via Afghanistan has dropped to zero. Official data from Pakistan’s Trade Development Authority indicates that the value of trade for the fiscal year 2025-2026 has decreased to $358 million, a stark contrast to $1.3 billion in the previous fiscal year, marking a 74% decline.

Impact of Border Closures on Pakistan’s Industrial Sector

New statistics from the first quarter of the current fiscal year reveal that the 95% drop in trade continues unabated. The closure of trade routes, which began on the 20th of October 1404 in the Persian calendar due to border clashes, has severely impacted Pakistan’s industries, particularly the pharmaceutical sector, resulting in over a 25% decline in its exports.

The interim government of Afghanistan has conditioned the reopening of these routes on receiving written guarantees from Islamabad to prevent the political exploitation of these pathways. Economic experts suggest that while the border closures have negatively affected Afghanistan’s $1 billion exports, the primary damage has been inflicted upon Pakistan’s industries, which have lost access to Afghanistan’s 40 million market and routes to Central Asia.