ISLAMABAD
\nAfghanistan-Pakistan transit trade has suffered one of its steepest declines, plunging to just 11,592 containers worth $367 million in the outgoing fiscal year from nearly 89,000 containers valued at $5 billion before the Taliban returned to power, as Kabul\u2019s growing reliance on Iranian routes and Pakistan\u2019s border curbs reshaped the decades-old trade corridor.
\nAt first glance, the collapse appears to validate the widely held view that Pakistan\u2019s decision to close its border with Afghanistan in October 2025 over security concerns brought bilateral transit trade to a standstill. However, while the border closure undoubtedly accelerated the decline, data shows that transit trade had already begun losing momentum well before Islamabad adopted its most strict restrictions.
\nTrade analysts say the border closure did not initiate Kabul\u2019s search for alternative trade routes. Rather, it marked the culmination of a strategy the Afghan Taliban had already begun to reduce Afghanistan\u2019s dependence on Pakistani ports. Kabul has pursued a deliberate policy of expanding trade through Iran and strengthening commercial links with Central Asian neighbours. Pakistan served for decades as Afghanistan\u2019s cheapest and principal gateway to international markets.
\nThe latest transit trade data show that Afghan transit through Pakistan expanded steadily during the period of the democratically elected government. Container traffic increased from about 60,500 containers in FY17 to nearly 89,000 containers in FY21, immediately before the Taliban returned to power.
\nThis growth occurred despite often strained political relations between Pakistan and the government of former Afghanistan president Ashraf Ghani. Although diplomatic ties remained tense, Kabul continued to rely on Pakistani ports as its primary gateway for international trade and did not discourage importers from using them. One reason may have been to help Afghan businesses import essential goods at lower transport costs and limit inflationary pressure in a highly import-dependent economy.
\nFollowing the Taliban\u2019s return to power, transit cargo via Pakistan initially recovered, with container traffic reaching 102,886 and cargo valued at $6.7bn in FY23. However, this marked the peak rather than the start of sustained growth. Transit volumes fell to 54,114 containers in FY24 and 42,959 containers worth $1.36bn in FY25, well before Pakistan closed the border in October 2025.
\nThe decline suggests that the Taliban had already begun diverting part of Afghanistan\u2019s trade to alternative routes before Islamabad\u2019s decision to close the border on security grounds. The collapse in reverse transit was even more dramatic. Reverse transit, which allows Afghan exports to reach third countries, particularly India, through the Wagah border and Karachi ports, fell from $454m in FY25 to just $7m in FY26, bringing a decades-old trade corridor almost to a halt.
\nHowever, while the Taliban managed to secure alternative import routes, especially through Iran, the shift came at a high economic cost. According to the World Bank\u2019s Afghanistan Economic Monitor 2026, Afghanistan\u2019s imports rose 15pc to $13.2bn in FY25. Iran emerged as the largest source of imports with a 31.3pc share, while Iran\u2019s direct and transit corridors accounted for 48.6pc of Afghanistan\u2019s total imports, highlighting growing reliance on Iranian routes.
\nThis diversion reduced Pakistan\u2019s leverage but carried economic costs for Afghanistan. The country lost export opportunities, particularly for agricultural products and coal, while longer and more expensive supply routes increased import costs, adding to inflationary pressure on businesses and consumers.
\nThe World Bank notes that prolonged closures of key Pakistan border crossings, coupled with conflict and geopolitical tensions in the Middle East, have weakened Afghanistan\u2019s external trade by disrupting traditional transit routes and increasing transport and logistics costs. The diversion of trade away from Pakistan has also imposed high costs on Afghanistan\u2019s economy through lower revenue collection and falling exports in FY25.
\nTraders report sharp increases in the prices of essential goods, including rice, vegetable ghee and pharmaceutical products, as imports are increasingly routed through longer and more expensive corridors.
\nThe higher transport and logistics costs are ultimately passed on to consumers, adding to inflationary pressure. The burden falls disproportionately on eastern and southern Afghanistan, particularly Pakhtun communities that have traditionally relied on Pakistani goods and cross-border commerce.
\nThe economic disruption extends beyond higher consumer prices. The near-collapse of transit trade has affected thousands of people whose livelihoods depend on cross-border commerce, including truck drivers, loaders, customs clearing agents, warehouse workers and other semi-skilled labourers. Reduced commercial activity has also translated into fewer employment opportunities and lower household incomes on both sides of the border. \u2014 DNA<\/p>\n","protected":false},"excerpt":{"rendered":"
ISLAMABAD Afghanistan-Pakistan transit trade has suffered one of its steepest declines, plunging to just 11,592 containers worth $367 million in the outgoing fiscal year from nearly 89,000 containers valued at $5 billion before the Taliban returned to power, as Kabul\u2019s growing reliance on Iranian routes and Pakistan\u2019s border curbs reshaped the decades-old trade corridor. At […]<\/p>\n","protected":false},"author":2,"featured_media":557259,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-557241","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business"],"yoast_head":"\n