Pak-Afghan exports rebound but transit trade crumbles

ISLAMABAD: Trade ties between Pakistan and Afghanistan are showing signs of revival, with bilateral goods trade soaring by 27 percent to $1.575 billion during July–March of the current fiscal year (2024-25), according to the latest data from Customs. This resurgence is largely fueled by a 33 percent increase in Pakistan’s exports, which reached $1.05 billion, signaling renewed demand for Pakistani goods across the border.

Afghanistan, in turn, ramped up its exports to Pakistan by 16 percent, totaling $524 million, reflecting a modest yet steady flow of Afghan products such as cotton, spices and cereals into the Pakistani markets.

Yet, behind the celebratory numbers lies a contrasting story. Afghanistan’s transit trade via Pakistan — a critical lifeline for the landlocked country — has collapsed by 84 percent in the wake of Pakistan’s sweeping anti-smuggling crackdown. From $7.48 billion a year earlier, the total transit trade has plummeted to just $1.2 billion in the post-crackdown period (Nov 2023–Nov 2024).

The transit trade during the first nine months (July-March) of fiscal year 2024-25, saw a steep decline of 64 percent, falling to $836 million from $2.33 billion in the same period of the previous year. Forward cargo — imports into Afghanistan — also plunged by 64 percent, dropping to $809 million from $2.28 billion. Meanwhile, reverse cargo — exports from Afghanistan — decreased by 46 percent, falling to $27 million from $50 million.

Pakistan’s export basket to Afghanistan has undergone a significant shift. Leading the surge is sugar, which jumped a staggering 4,333 percent, reaching $262.8 million — up from just $5.9 million last year. Pharmaceuticals, cement, edible oils, and aluminum goods also posted strong double-digit growth.

Agriculture and food exports to Afghanistan surged 43 percent to $690 million, while manufacturing and engineering goods rose 18 percent to $353 million. But textile and apparel shipments dropped 19 percent to $7.46 million, and rice exports fell 25 percent to $180.8 million.

On the import side, cotton imports from Afghanistan more than doubled to $167 million, while spice shipments jumped nearly fivefold to $21.2 million. But coal imports fell 20 percent to $71.5 million, fruits and nuts dropped 13 percent to $86.8 million, and LPG imports plunged to zero.

Once a vital cross-border route, Afghanistan’s transit trade through Pakistan is rapidly shrinking, with forward cargo (imports into Afghanistan) plunging 86 percent and reverse cargo (Afghan exports via Pakistan) halved.

Transit trade saw a modest 6 percent rise in March 2025 from February, but year-on-year it’s down nearly two-thirds. Officials attribute the sharp decline to Pakistan’s crackdown on smuggling and misuse of transit routes.

While bilateral trade numbers show momentum, the dismal state of transit trade signals deeper geopolitical and logistical tensions. If the current policies persist, Afghanistan may continue to diversify its trade routes — possibly towards Iran and Central Asia — posing long-term challenges for Pakistan’s strategic trade relevance, trade experts believe. Still, the rising official trade signals resilience and mutual dependence in formal commerce.