Afghanistan Peace Campaign
Trade between Pakistan and Afghanistan fell by 74 per cent to $358 million in the 2025-26 financial year, as prolonged border closures and rising tensions disrupted cross-border commerce, according to official Pakistani trade data reported by Dawn.
Bilateral trade dropped from $1.3 billion in 2024-25 to $358 million in 2025-26, according to figures released by Pakistan’s Trade Development Authority. The decline has affected manufacturers, transport companies, agricultural traders and communities dependent on cross-border commerce.
The Torkham crossing was closed on October 12, 2025, following deadly clashes between the two countries. Other crossings, including Kharlachi, Ghulam Khan and Angoor Adda in Khyber Pakhtunkhwa, and Chaman in Balochistan, have also remained closed to commercial traffic, according to the report.
Afghanistan transit trade through Pakistan has also plunged. The number of transit containers fell from nearly 89,000, valued at about $5 billion before the Taliban returned to power, to 11,592 containers worth $367 million in the 2025-26 financial year. However, the decline began before the latest border closures, as Afghanistan increasingly sought alternative trade routes, particularly through Iran.
Pakistan exports pharmaceutical products, cement, plastics, rice, fruits and vegetables to Afghanistan. Its imports from Afghanistan include onions, tomatoes, agricultural seeds, grapes, dried apricots, apples, coal and unwrought lead.
The disruption has hit Pakistan’s transport and pharmaceutical industries particularly hard. Junaid Altaf, a former president of the Sarhad Chamber of Commerce and Industry, said businesses and workers in Khyber Pakhtunkhwa were facing growing economic difficulties. He also highlighted the province’s higher logistics costs because of its distance from major seaports and international shipping routes.
Pakistan’s pharmaceutical industry has lost access to a significant export market. According to Pakistan Bureau of Statistics figures cited by Dawn, the country exported about $130 million worth of pharmaceutical products to Afghanistan in 2023-24. The loss of that market could affect production, investment and employment in the sector.
Agricultural traders have also reported substantial losses. Malik Sohni, president of the All Pakistan Agricultural Produce Traders Federation, said up to 50 trucks carrying potatoes and 25 trucks carrying fresh vegetables used to travel from Pakistan to Afghanistan daily before the disruption.
Sohni said he had suffered losses of 180 million Pakistani rupees after hostilities disrupted trade and potato prices fell. He added that potato cultivation had declined by almost half, warning that reduced supply could push prices higher.
The transport sector has also come under pressure. A transporter identified by Dawn as Azeemullah said he had been forced to sell three of his five trucks because the prolonged closure made it economically unviable to redirect them to other parts of Pakistan. The disruption has also affected Pakistani exports destined for Central Asian markets.
Pakistani business leaders, however, differ over the economic consequences and the priority that should be given to reopening trade. Fuad Ishaq, a Peshawar-based businessman and former chamber president, argued that security concerns should take precedence and that Pakistani exporters could seek alternative markets. Other business representatives have called for a sustainable approach that protects security while allowing regulated trade to resume.
The trade decline comes amid deteriorating relations between Islamabad and Taliban authorities over security. Pakistan has demanded concrete, verifiable action against armed groups it says operate from Afghanistan territory and carry out attacks inside Pakistan. Taliban authorities have rejected allegations that Afghanistan’s territory is being used to launch attacks against neighbouring countries.