Afghanistan's economy Updates

[ghazi52]

Why Pakistan's border closure is squeezing Afghanistan's economy​

As fresh attacks test Pakistan’s limits, the country turns to its most powerful leverage — its borders

By Shahbaz Rana |
PUBLISHED November 16, 2025

ISLAMABAD: After the collapse of Istanbul dialogue and two terror attacks on its soil originating from Afghanistan, Pakistan’s any likely decision to simultaneously exercise the options of blocking across the border human and trade movement and flexing security muscles can compound Kabul’s woes and build internal pressure on the regime to normalise ties.

According to trade statistics, Afghanistan exports to Pakistan were equal to 45 percent of its total exports in 2024, making Islamabad the single largest trading partner. Kabul’s heavy dependence on Islamabad and given its landlocked country status, the western neighbour has limited alternatives to suddenly find a sustainable market for nearly half of its exports.

From its southeastern, south and eastern sides, Afghanistan uses three border crossing points to sell its goods to Pakistan. These are near to its farm produce and make Pakistan an economically viable option to sell fresh fruits, vegetables and dry fruits.

According to Pakistan Customs, Kabul exported Rs170 billion worth of goods to Pakistan through these border crossings in the fiscal year 2024-25. Over 70 percent of the goods were sent via the Torkham border, followed by one-fifth from Ghulam Khan and the rest through Kharlachi point.

After the closure of the borders due to unrest and grave security situation, farmers in Afghanistan are in pain because of huge financial losses. Afghanistan’s perishable exports like fresh fruits, vegetables, and dry fruits are dependent on short-distance, low-cost transport to Pakistani markets. Diversion through other countries makes such exports less competitive due to longer transit and higher risks of perishable goods being rotten. There is also a lack of cold storage facilities to transport perishable goods to long-distance sea ports.

Realising the situation and to avoid losses, Afghan exporters are still making desperate attempts to reach Pakistani markets through alternate routes. Pakistan Customs on November 8th blocked the import of Afghan-origin goods via Iran by misusing the Early Harvest Programme. The attempt was made to use the Taftan post from the Iran side.

The Pakistan Customs did not permit the entry of the consignment into Pakistan on the grounds that the early harvest programme was aimed at providing mutual benefits to the farmers of both the countries on a bilateral and reciprocal basis. However, no trade was taking place between Pakistan and Afghanistan as the borders remained closed.

The Customs also denied the entry of Afghan-origin goods on the grounds that there was a potential risk of misuse of the early harvest facility, as similar consignments can be imported from Iran under the guise of Afghan origin, given that both countries produce comparable fresh fruits such as grapes and apples, which are also covered under the Early Harvest Programme.

If Pakistan does not open its borders and also restrict Afghan citizens’ movement, the interim government may not have many options in the short term. The alternative routes through Iran are Chabahar port and Hairatan–Termez, Torghundi–Serhetabat in Central Asia.

These corridors face high transportation costs, weak infrastructure, and complicated regional politics. Thus, despite tensions, Pakistan would remain the most viable and cost-effective trade corridor for Afghanistan in the foreseeable future.

The Afghan interim government this week expressed the desire to opt for alternate trade routes but it may not be able to provide those opportunities to its exporters in the short-to-medium term.

 

[ghazi52]

The Iranian routes are longer and more expensive, resulting in higher transportation and fuel costs compared to the Pakistani corridors. Kandahar and Helmand regions are about 150–300 kilometre from Pakistan’s Chaman–Spin Boldak borders but 1,200–1,300 kilometer to Iran’s Zaranj or Delaram borders.

Likewise, Balkh and Baghlan are roughly 500–700 kilometer from Pakistan’s Torkham-Jalalabad borders and 900–1,000 kilometer from Iran’s Islam Qala.

Alternate routes would substantially increase transport charges, ranging from 30 – 50 percent. Where Afghan farmers are facing problems, Pakistani transporters were also having less earning opportunities due to closure of the borders.

The growing number of Afghanistan-bound cargo stuck up in Pakistan despite the closure of international borders after skirmishes highlight the landlocked Kabul’s dependence on Pakistan amid its desire to look for alternate routes.

According to Pakistan Customs, Afghanistan-bound over 5,500 containers have been stuck either on roads or at Karachi port. About 4,650 containers were stuck at the sea and land ports after the Pakistan Customs stopped their processing due to closure of international borders.

Pakistan has not suspended the Afghanistan Transit Trade Agreement but it was not processing the goods clearance due to closure of borders to avoid congestion at Chaman and Torkham borders. There were 729 containers stuck up at Chaman border and another 142 at Torkham border.

Pakistan made many positive gestures on the fronts of trade, humanitarian assistance, educational and medical visa facilitation, and efforts at international forums to encourage the international community to engage with the Taliban regime in the interest of regional peace and stability, and for the socio-economic development of Afghanistan and its people.

But the response from the Taliban regime has only been hollow promises and inaction and the excuse that it cannot take action against the terror outfit. If the situation does not improve, Pakistan could also think about other economically punitive measures, including demanding bank guarantees against transit cargo.

 

[ghazi52]

Pakistan has suffered immense military and civilian casualties, exercised maximum restraint and did not retaliate, according to Pakistan’s Ministry of Foreign Affairs.

However, now the indicators are that the maximum restraint may not be an option any more.

Pakistan’s Foreign Office said that the Taliban regime was constantly trying to misrepresent the issue of Pakistani terrorists hiding in Afghanistan as a humanitarian issue. In the aftermath of Pakistan’s Operation Zarb-e-Azb in 2015, terrorists belonging to the so-called TTP/FaK fled to Afghanistan.

The recent terror attacks at Judicial Complex, Islamabad, which killed over 12 innocent civilians, and an attack on a Cadet College in Khyber Pakhtunkhwa could prove the last straw in the camel’s back.

According to the Pakistani authorities Sajid ullah alias Shina, who was the handler of the suicide bomber, confessed that TTP commander Saeed ur‑Rahman, alias Dadullah, a resident of Charmang, Bajaur who is currently living in Afghanistan and serving as the TTP’s intelligence chief for Bajaur’s Nawagai, contacted him via the Telegram app and instructed him to carry out a suicide attack in Islamabad in order to inflict maximum damage on law‑enforcement agencies.

Dadullah sent Sajid ullah (Shina) the pictures of the suicide bomber, Usman, alias Qari, so that he could receive him in Pakistan. The suicide bomber, Usman (Qari), belonged to the Shinwari tribe and was a resident of Achin, Nangarhar, Afghanistan.

The traces of attack on Cadet College are also found in Afghanistan by the security agencies.

Pakistan’s former ambassador to Kabul, Mansoor Ahmad Khan, argued in Express News show, The Review, the government can use the three options of restricting movement of people, trade and using security means to put pressure on the regime to take action against the terrorist outfit. But he emphasised upon the need of trying to reopen the dialogue with Afghanistan.

 

[ghazi52]

Landlocked Afghanistan is leaning more heavily on trade routes through Iran and Central Asia to reduce dependence on Pakistan, officials said, as tension between the neighbours escalates, with their border closed in recent weeks, Reuters reported.

Afghanistan's reliance on Pakistan's ports has long given Islamabad leverage to press Kabul over outlaws sheltering across the border.

But Afghanistan is increasingly making use of Iran's concessions to shift freight to its Indian-backed port of Chabahar, bypassing Pakistan and avoiding recurring border and transit disruptions.

"In the past six months, our trade with Iran has reached $1.6 billion, higher than the $1.1 billion exchanged with Pakistan," Abdul Salam Jawad Akhundzada, a spokesman for the commerce ministry, told Reuters. "The facilities at Chabahar have reduced delays and given traders confidence that shipments will not stop when borders close."

 

[ghazi52]

Three-month deadline

Traders have three months to settle contracts in Pakistan and shift to other routes, said Mullah Abdul Ghani Baradar, Afghanistan's deputy prime minister for economic affairs. He said Afghanistan would not mediate disputes after the deadline and ordered ministries to stop clearing Pakistani medicines, citing "low-quality" imports.

The biggest shift is to Chabahar, used since 2017 under a transit pact with Iran and India.

Afghan officials say incentives from tariff cuts and discounted storage to faster handling are drawing more cargo south. Iran has installed updated equipment and X-ray scanners, while offering Afghan cargo a 30% cut in port tariffs, 75% off storage fees and 55% off docking charges, said Akhundzada, the commerce ministry spokesman.

 

[ghazi52]

Pakistan sees no harm from Afghan decision

Afghanistan’s decision would cause no economic harm to Pakistan, Defence Minister Khawaja Asif told. "Afghanistan can trade through any port or country," he said. However, Commerce Minister Jam Kamal Khan told Reuters, "We cannot compromise on security."

India has stepped up engagement with Afghanistan's ruling Taliban, hosting acting foreign minister Amir Khan Muttaqi and broadening humanitarian assistance.

It runs key terminals at Chabahar, which it sees as a strategic link to Afghanistan and Central Asia. In October, the United States gave New Delhi a six-month sanctions waiver to keep running the port.

 

[ghazi52]

Central Asia corridors expand

Afghanistan has boosted shipments through Turkmenistan, Uzbekistan and Tajikistan, routes it says are growing faster than Pakistan's. As advantages Akhundzada cited new transit deals, lower border costs and offices at Milak and Zahedan, Iran's main border crossing points for Afghan trade.

But Pakistan is still the fastest route to the sea, with trucks reaching its southern port of Karachi in three days. Its exports to Afghanistan neared $1.5 billion in 2024.

 

[Tremain]

Afghanistan's alternative trade routes and a trade misunderstood | The Express Tribune

Afghanistan's alternative trade routes and a trade misunderstood

tribune.com.pk

The Afghan Deputy Prime Minister for Economic Affairs, Mullah Abdul Ghani Baradar, has directed Afghan traders and industrialists to explore alternative trade routes instead of relying on Pakistan. This is a wise decision because he knows that Pakistan will not allow Pak-Afghan trade when incidents such as the Wana Cadet College and Islamabad Lower Courts attacks continue.

I personally wish to thank him for this announcement because the Pak-Afghan transit trade route has been instrumental in all kinds of smuggling in Pakistan for ages, discouraging Pakistani industrialists from investing in several fields as cheaper imported items are always available in the local market through Pak-Afghan transit trade smuggling rackets.

For now, Pakistan has realised that trade diplomacy, while important in shaping economic landscapes, has never favoured Pakistan. Pakistan and Afghanistan's bilateral trade agreements are one of the main sources of bleeding Pakistan economically and politically, as this passage has been used for injecting terrorists into Pakistan. God knows how long this realisation will last, as the smuggling economy is vast and alluring for many who have the power to influence decision-makers in Islamabad.

The major chunk of Afghan exports to Pakistan consists of vegetables, fresh fruits and dry fruits — all abundant in its neighbouring countries except Pakistan. Iran, Uzbekistan and Tajikistan all produce much better vegetables and fruits, and Afghanistan's handmade rugs also struggle to compete with Iranian, Uzbek and Tajik rugs.

None of these countries allow Afghans to work as labourers without a valid work visa. Securing a work visa in Central Asia is nearly as difficult as in Europe, with employers required to prove that no local worker has the needed skills. Yes, Iran has softer rules for its employment visa regime, so unskilled or even skilled Afghan labourers can work there, but not as freely as in Pakistan, where any Afghan can buy a wheelbarrow and start earning at any corner of the country. Moreover, none of these countries have a transit trade contract like Pakistan does with Afghanistan.

According to 2024 data, Iran-Afghan trade volume was $3.2 billion, with Afghanistan exporting goods worth just $54 million to Iran. Afghan exports to Uzbekistan were $10.4 million, while Uzbekistan's exports to Afghanistan reached $766 million in 2023. Almost the same huge trade imbalance exists with Turkmenistan and Tajikistan. The overall trade deficit is larger than officially documented, as Afghan annual exports were $474.93 million compared to imports of $3,591.27 million in 2024.

Pakistan is the only country that provides documentation-free open space for Afghans to earn thousands of dollars monthly to take back home as cash. It must be noted that Iran, Turkmenistan, Uzbekistan and Tajikistan do not allow taking cash out of their countries beyond a few hundred dollars.

The reason to cite numerical data is to understand that Afghanistan earns mostly from Pakistan and that too without proper regulation, and this has been the case for almost 45 years, since the Afghan Jihad era. If Pakistan ever enforces proper laws on international money transfer and on working without permits and visas, it will be a huge economic jolt to Afghanistan — and not just regarding the Pak-Afghan smuggling volume which, according to unconfirmed reports, is higher than Rs3,000 billion annually. Since Afghanistan knows that its networking within Pakistani politicians, bureaucracy, media and decision-makers is too strong, Pak-Afghan trade would neither halt for a long period nor be properly documented. Therefore, the Afghan regime has never been shy about bleeding Pakistan via terrorists or abusing Pakistan bluntly.

I strongly believe that Afghanistan will not behave like a state unless its illegal sources of income, such as working without proper visas or permits, smuggling and permission to take cash out of Pakistan, are curtailed. Afghanistan has always taken Pakistan for granted because of its strong internal networking within Pakistan, which complains whenever Pakistan, as a sovereign state, tries to control borders or regulate illegal activities.

Dr Shazia Anwer Cheema November 16, 2025

 

[Pakistan Space Agency]

Afghans can sell their goods to whoever they want but not through Pakistan.

Currently, Pakistan does not want Afghan goods which make up 45% of their exports, as the same goods can be imported from elsewhere. Pakistan is happy to bear to increase in costs.

It's best both Afghanistan and Pakistan go their separate ways and keep the border indefinitely closed.

 

[hydrabadi_arab]

God knows how long this realisation will last, as the smuggling economy is vast and alluring for many who have the power to influence decision-makers in Islamabad.

This is important point. The pressure to open borders will increase in coming days.

 

[Tremain]

This is important point. The pressure to open borders will increase in coming days.

I am counting on the 27th Amendment to give us a slightly better ability to resist such pressures.

I honestly do not trust any kind of politician to do the right thing. I never have.

The BBC wrote a stinker of an article on this. That always happens when we do something right.

 

[hydrabadi_arab]

Afghan border to stay shut indefinitely​

Officials say Pakistan wants 'verifiable, irreversible' action by Kabul

---

ISLAMABAD:
Pakistan has decided to keep its border crossings with Afghanistan shut for an indefinite period, signalling a hardened stance until the Afghan Taliban regime takes "verifiable and irreversible" action against terrorist outfits, particularly the banned Tehreek-e-Taliban Pakistan (TTP).

Officials told The Express Tribune that the government has conveyed to Kabul that the crossings will not reopen for trade and commercial activity unless concrete steps are taken to eliminate anti-Pakistan elements operating from Afghan soil.

The border closure, now stretching beyond a month, has left thousands of trucks and containers stranded on both sides, crippling bilateral trade and the regional transit route.

At present, the crossing points remain open only for one-way humanitarian movement, primarily to facilitate the return of Afghan refugees and stranded individuals.

"Human lives take precedence over trade and economic considerations," a senior official said, explaining why Islamabad is unwilling to compromise on terrorism concerns.

The decision aligns with Pakistan's sharpened messaging to Kabul. At the weekly press briefing on Friday, Foreign Office spokesperson Tahir Hussain Andrabi drew a clear red line, ruling out any "meaningful trade or economic engagement" with Afghanistan unless the Taliban regime acts decisively against groups targeting Pakistan.

"Pakistan is a strong proponent of regional trade and connectivity," Andrabi said. "We extended a number of trade concessions to Afghanistan, but these positive gestures have not been reciprocated by the Afghan Taliban regime, which continues to harbour and actively support elements perpetrating terrorism against Pakistan from Afghan soil."

He cited recent terrorist attacks in Islamabad and Wana, calling them a stark reminder of the threat emanating from across the border.

"Both incidents had deep Afghan fingerprints," he stressed. "In the Islamabad attack, an Afghan national was the suicide bomber. So let this reality sink in in Kabul."

Officials say the latest closure is not a routine border management measure but a strategic policy shift. The Taliban leadership has been privately informed that dialogue cannot continue without demonstrable action against the TTP and the group Pakistan now officially calls Fitna Al-Khawarij (FaK).

The spokesperson dismissed the Afghan Taliban's claim of being "helpless" against the TTP as untenable.

"They claim control over all Afghan territory, yet attacks on Pakistan continue to be orchestrated from Afghan soil," Andrabi said. "Afghan nationals involved in these attacks bear responsibility alongside the groups they harbour."

The standoff has also been sharpened by recent remarks from Taliban authorities warning Afghan traders against relying on Pakistan and urging them to shift business to other countries.

For now, Pakistan appears in no mood to budge. "Security first, trade later" is how one official summed up Islamabad's position.

 

[Dalit]

Afghan border to stay shut indefinitely​

Officials say Pakistan wants 'verifiable, irreversible' action by Kabul

---

ISLAMABAD:
Pakistan has decided to keep its border crossings with Afghanistan shut for an indefinite period, signalling a hardened stance until the Afghan Taliban regime takes "verifiable and irreversible" action against terrorist outfits, particularly the banned Tehreek-e-Taliban Pakistan (TTP).

Officials told The Express Tribune that the government has conveyed to Kabul that the crossings will not reopen for trade and commercial activity unless concrete steps are taken to eliminate anti-Pakistan elements operating from Afghan soil.

The border closure, now stretching beyond a month, has left thousands of trucks and containers stranded on both sides, crippling bilateral trade and the regional transit route.

At present, the crossing points remain open only for one-way humanitarian movement, primarily to facilitate the return of Afghan refugees and stranded individuals.

"Human lives take precedence over trade and economic considerations," a senior official said, explaining why Islamabad is unwilling to compromise on terrorism concerns.

The decision aligns with Pakistan's sharpened messaging to Kabul. At the weekly press briefing on Friday, Foreign Office spokesperson Tahir Hussain Andrabi drew a clear red line, ruling out any "meaningful trade or economic engagement" with Afghanistan unless the Taliban regime acts decisively against groups targeting Pakistan.

"Pakistan is a strong proponent of regional trade and connectivity," Andrabi said. "We extended a number of trade concessions to Afghanistan, but these positive gestures have not been reciprocated by the Afghan Taliban regime, which continues to harbour and actively support elements perpetrating terrorism against Pakistan from Afghan soil."

He cited recent terrorist attacks in Islamabad and Wana, calling them a stark reminder of the threat emanating from across the border.

"Both incidents had deep Afghan fingerprints," he stressed. "In the Islamabad attack, an Afghan national was the suicide bomber. So let this reality sink in in Kabul."

Officials say the latest closure is not a routine border management measure but a strategic policy shift. The Taliban leadership has been privately informed that dialogue cannot continue without demonstrable action against the TTP and the group Pakistan now officially calls Fitna Al-Khawarij (FaK).

The spokesperson dismissed the Afghan Taliban's claim of being "helpless" against the TTP as untenable.

"They claim control over all Afghan territory, yet attacks on Pakistan continue to be orchestrated from Afghan soil," Andrabi said. "Afghan nationals involved in these attacks bear responsibility alongside the groups they harbour."

The standoff has also been sharpened by recent remarks from Taliban authorities warning Afghan traders against relying on Pakistan and urging them to shift business to other countries.

For now, Pakistan appears in no mood to budge. "Security first, trade later" is how one official summed up Islamabad's position.

Very very good.

 

[hydrabadi_arab]

Security first, trade later!

 

[Olympus81]

This issue will not hit Afghanistan alone. It will have repercussions for Pakistan as well.

Let me give you an example.

Pakistan imports millions of dollars worth of gemstones from Afghanistan (Tourmalines, Emeralds, Peridots etc) which is then cut, polished in Peshawar (Namak Mandi) and workshops in Karachi, then exported to markets in China, Hong Kong, Germany, Thailand, USA etc. When the raw material sourcing dries up then value add and re export will remain a pipe dream.

Suffice to say Pakistan imports these gemstones through grey channels without paying any duties and the goods cut/polished are exported with gross under invoicing losing Pakistan precious foreign currency.