Afghan-Pak Transit Trade Falls to USD 367 Million as Kabul Shifts Away from Pakistani Routes

Afghanistan-Pakistan transit trade has fallen sharply to USD 367 million in FY2025-26 from nearly USD 5 billion in 2021, reflecting a major realignment in regional trade as the Taliban-led administration increasingly shifts cargo through Iran and Central Asian routes while bilateral ties with Pakistan remain strained.

According to Pakistan's Dawn newspaper, transit trade declined to 11,592 containers in FY26, compared with nearly 89,000 containers before the Taliban returned to power in August 2021. Pakistan's closure of its border with Afghanistan in October 2025 over security concerns affected trade, but official data shows the decline had begun much earlier. Transit cargo had peaked at 102,886 containers worth USD 6.7 billion in FY23 before falling to 54,114 containers in FY24 and 42,959 containers valued at USD 1.36 billion in FY25.

Trade analysts told Dawn that the Taliban government had already begun reducing dependence on Pakistani ports by expanding the use of Iran's Chabahar Port and alternative corridors through Uzbekistan, Turkmenistan and Tajikistan . While the strategy has reduced Pakistan's leverage over Afghan trade, it has also increased transport and logistics costs, adding inflationary pressure and affecting employment in border communities on both sides. Reverse transit trade, which enables Afghan exports to third countries including India through Pakistan, also collapsed from USD 454 million in FY25 to just USD 7 million in FY26.

The downturn comes as Afghanistan is simultaneously seeking stronger economic engagement with India. The Afghanistan Chamber of Commerce and Investment has urged New Delhi to expand trade and investment, simplify business procedures and ease business visa norms, signalling Kabul's broader effort to diversify regional economic partnerships.

Pakistan continues to accuse the banned Tehreek-e-Taliban Pakistan (TTP) of carrying out attacks from Afghan territory after the collapse of a ceasefire in November 2022, a charge the Taliban administration denies.