The prolonged closure of trade corridors between Pakistan and Afghanistan, now exceeding three months, has inflicted billions of rupees in economic damage at both national and regional levels. 

Business leaders in Khyber Pakhtunkhwa have highlighted the severe toll on exports, mutual commerce, transport operations, and government revenues, delivering a crippling blow to Pakistan's economy—particularly in KP, where cross-border trade forms the backbone of local prosperity.

Senior vice-president of the Pakistan-Afghanistan Joint Chamber of Commerce and Industry, Ziaul Haq Sarhadi, alongside Sarhad Chamber of Commerce and Industry member Manzoor Ellahi, issued a joint statement underscoring the crisis.

They emphasised that KP has borne the brunt of the disruption due to its geographical proximity to Afghanistan, deep ethnic ties, and heavy reliance on bilateral trade. Over 90 per cent of Pakistan's exports to Afghanistan transit through KP's customs facilities, primarily via the vital Torkham border crossing.

Export losses in the province alone are estimated at PKR 2.5 billion, stemming from halted consignments of key goods including cement, textiles, pharmaceuticals, construction materials, and agricultural products. Compounding this, KP has forfeited nearly PKR 2.5 billion in customs revenue during the first five months of the 2025-26 fiscal year, as trade volumes plummeted and border activity ground to a halt.

Daily losses for provincial exporters now exceed USD 4 million, with merchandise worth billions of rupees stranded in limbo. Perishable goods such as fruits and vegetables have rotted en route, while medicines and raw materials have expired, resulting in irreparable financial setbacks for businesses large and small.

The ripple effects extend to Afghanistan's transit trade to Central Asia, which previously handled 4,000 to 5,000 consignments annually. This downturn has paralysed KP's logistics and transport sectors, slashing associated incomes and leaving thousands of truck drivers, loaders, and daily wage labourers without work.

Broader economic consequences loom large, with factory closures and mass unemployment on the horizon. Up to 90 per cent of KP's industrial base depends on Afghan markets for both imports and exports; sustained disruption risks widespread plant shutdowns, exacerbating joblessness and fuelling regional instability amid mounting economic distress.

Markets in Peshawar and surrounding cities have seen sharp declines in activity, as traders and farmers grapple with unsold produce and stalled supply chains. The decay of perishable items has hit agricultural communities hardest, wiping out livelihoods dependent on timely cross-border movement.

Long-term risks are even more alarming. Afghanistan has begun diverting trade routes to Iran and Central Asian states, potentially eroding KP traders' market share permanently. Business representatives warn that this shift could lock out Pakistani goods from key regional networks for years to come.

Recent data paints a stark picture: Pakistan-Afghanistan bilateral trade has plunged 53 per cent year-on-year, slumping to USD 594 million in the first half of FY 2025-26 from USD 1.26 billion the previous year. Border closures remain the primary culprit, choking off a vital economic artery.

The ongoing impasse continues to erode businesses, revenues, employment opportunities, and overall stability across the region. Without swift resolution, KP's trade-dependent economy faces deepening crisis, with national repercussions that could undermine Pakistan's fiscal recovery efforts.

Based On ANI Report