Afghanistan-Pakistan transit trade has experienced one of its sharpest declines in recent history, dropping to USD Afghanistan-Pakistan transit trade has experienced one of its sharpest declines in recent history, falling to just $367 million in the outgoing fiscal year.

This represents a dramatic collapse from the $5 billion recorded in 2021, according to figures reported by Dawn. The volume of cargo has shrunk to 11,592 containers, a stark contrast to the nearly 89,000 containers handled before the Taliban’s return to power.

The downturn is attributed to Kabul’s increasing reliance on Iranian trade routes, which have steadily eroded Pakistan’s role as Afghanistan’s primary transit partner. Pakistan’s decision to close its border with Afghanistan in October 2025 over security concerns further impacted trade, but data shows that the decline had already begun well before the restrictions were enforced.

Container traffic had previously risen from about 60,500 in FY-17 to nearly 89,000 in FY-21, immediately before the Taliban takeover. Following their return to power, transit cargo via Pakistan initially rebounded, with traffic reaching 1,02,886 containers and cargo valued at $6.7 billion in FY-23.

However, this recovery proved short-lived. Volumes fell to 54,114 containers in FY-24 and 42,959 containers worth $1.36 billion in FY-25, signalling a downward trajectory even before the border closure.

Trade analysts argue that the border closure did not trigger Afghanistan’s search for alternative routes but rather marked the culmination of a deliberate strategy by the Taliban to reduce dependence on Pakistani ports. This shift has diminished Pakistan’s leverage over Afghan trade but has also imposed economic costs on Afghanistan itself.

Higher transport and logistics expenses through alternative routes are being passed on to consumers, fuelling inflationary pressures. The burden is felt most acutely in eastern and southern Afghanistan, particularly among Pakhtun communities that have traditionally relied on Pakistani goods and cross-border commerce. Reduced commercial activity has also led to fewer employment opportunities and declining household incomes on both sides of the border.

The collapse of transit trade underscores the fragility of regional economic ties and highlights the broader geopolitical realignment underway.

Afghanistan’s pivot towards Iran for trade access reflects both strategic and political considerations, while Pakistan’s loss of transit dominance carries long-term implications for its economic influence in the region.

PTI