Trade relations between Pakistan and Afghanistan have witnessed significant growth, as the trade of bilateral goods increased by 27 % to $ 1.575 billion during the first nine months (July to March) of the current fiscal year 2024-25, according to the latest data from customs.
One of the main factors that lead this increase was 33 % in Pakistan’s exports to Afghanistan, which total $ 1.05 billion, indicating the increasing demand for Pakistani products across the border.
Afghanistan has also raised its exports to Pakistan, an increase of 16 %, up to its total exports to 524 million dollars. These products mainly include cotton, spices and grains, which are now more easily absorbed into the Pakistani market.
However, despite the positive numbers in bilateral trade, the transportation trade in Afghanistan through Pakistan has faced a severe decrease by 84 % since Pakistan’s implementation of the arc control. The total value of the transportation trade decreased from 7.48 billion dollars last year to only $ 1.2 billion in the period 2023 November 2024.
In the first nine months of the fiscal year 2024-25, the decline was 64 %, as the value of the transportation trade decreased to $ 836 million from $ 2.33 billion in the same period last year. Imports to Afghanistan, or front charging, decreased by 64 %, while Afghan exports decreased through Pakistan, or reverse goods, by 46 %.
Pakistan’s exports to Afghanistan showed a major shift, as sugar drives the shipment. Sugar exports increased by 4333 %, reaching 262.8 million dollars, compared to only $ 5.9 million last year. Other prominent increases were seen in medications, cement, edible oils, and aluminum goods. The export of agriculture and food increased by 43 % to $ 690 million, while manufacturing and engineering goods grew by 18 % to $ 353 million. However, fabric and clothing exports decreased by 19 %, and rice exports decreased by 25 %.
On the import side, cotton imports in Pakistan increased more than twice as much as to $ 167 million, while spice shipments grew nearly five times to $ 21.2 million. However, the imports of coal, fruits and nuts have seen declines, and LPG imports decreased to scratch.
Experts suggest that the decline in the transit trade can lead to Afghanistan to search for alternative commercial roads, including through Iran and Central Asia, which can lead to the erosion of the strategic importance of Pakistan as a commercial channel. Nevertheless, the rise in official trade numbers reflects a flexible commercial relationship and depends on each other.