Trade between Pakistan and Afghanistan is showing signs of a strong recovery — but not everything is moving in the right direction. While official trade between the two neighbors has grown significantly, Afghanistan’s once-vital transit trade through Pakistan has collapsed, largely due to Islamabad’s sweeping anti-smuggling operations.
According to reports by the media, data from Pakistan’s Customs department shows that bilateral trade between July 2024 and March 2025 jumped 27%, reaching $1.575 billion. This growth has been driven by a major boost in Pakistan’s exports to Afghanistan, which soared 33% to $1.05 billion. Afghan exports to Pakistan also rose 16%, totaling $524 million.
However, Afghanistan’s transit trade — the route it relies on to import goods from other countries via Pakistan — has fallen off a cliff. Once valued at $7.48 billion annually, the transit trade has now plunged to just $1.2 billion in the period from November 2023 to November 2024 — a staggering 84% drop.
Between July and March, transit trade dropped 64% compared to the same period last year, with imports into Afghanistan (known as forward cargo) falling from $2.28 billion to just $809 million. Afghan goods sent through Pakistan to other countries (reverse cargo) also declined 46%, down to $27 million.
Pakistan’s export profile to Afghanistan has changed dramatically. Sugar exports skyrocketed more than 4,000%, reaching $262.8 million — up from just $5.9 million the previous year. Pharmaceuticals, cement, cooking oils, and aluminum products also posted strong gains.
Agricultural and food exports jumped 43% to $690 million, while manufacturing and engineering goods rose 18% to $353 million. But not all sectors are thriving — textile exports dropped 19% to $7.46 million, and rice exports fell 25% to $180.8 million.
On the import side, Pakistan brought in more cotton from Afghanistan — imports more than doubled to $167 million — and spices saw a five-fold increase, reaching $21.2 million. But coal imports dropped 20%, and shipments of fruit, nuts, and LPG also saw declines.
Afghanistan’s dependence on Pakistan for its transit trade is waning fast. Forward cargo (goods going into Afghanistan) is down 86%, and reverse cargo (Afghanistan’s exports via Pakistan) has been cut in half. While there was a slight 6% month-on-month rise in March 2025, the overall picture is grim — year-on-year figures show a nearly 66% decline.
Pakistani officials link this sharp downturn to the government’s aggressive measures against smuggling and misuse of the transit trade system, which had been widely exploited in recent years.
Experts warn that if current restrictions remain, Afghanistan may continue redirecting its trade through other countries — including Iran and Central Asian neighbors. This shift could weaken Pakistan’s long-term role as a key trade route in the region.
Still, the growth in formal, documented trade shows there is mutual economic interest and dependency between the two countries. While transit trade suffers, official exports and imports are bouncing back — offering a silver lining amid ongoing geopolitical tensions.
