Pakistan’s trade activities with Afghanistan, Russia, and the Central Asian Republics (CARs) have experienced a significant downturn during the first nine months of the fiscal year 2025-26, primarily triggered by the closure of the Afghan border. This development was highlighted in a session of the National Assembly Committee on Commerce held recently.
Officials noted that disruptions in regional trade corridors and escalating geopolitical tensions have severely affected logistics and transit operations. Official statistics reveal that imports from Afghanistan plunged by 88.3 percent, falling from $475.28 million in July-March FY2024-25 to just $55.60 million in the corresponding period of FY2025-26.
Similarly, imports from Tajikistan decreased by 97.3 percent, while other regional partners including Uzbekistan, Turkmenistan, Russia, Kazakhstan, and Kyrgyzstan experienced substantial double-digit drops. These declines underscore the reduced regional connectivity and interruptions in established trade routes.
Exports to Afghanistan and the CARs also contracted sharply, with an overall decrease of 68 percent to $335.62 million. This has led to an estimated loss of $805 million in export and transit revenues over seven months. The closure of the Afghan border since October 11, 2025, has been pinpointed as the main cause, resulting in over 7,500 transit containers being stranded at ports and border points, effectively halting overland trade through this corridor.
The data further highlighted that Pakistan has forfeited export opportunities in key sectors such as pharmaceuticals, cement, processed food, tractors, and motorcycles. Transport operators have also suffered significant revenue losses due to the suspension of transit trade.
In response, the government has redirected efforts towards developing alternative trade corridors, including routes via Iran and China, alongside exploring air and sea re-routing options for Central Asian cargo. Since December 2025, more than 7,000 trucks carrying Kinnow and potatoes valued at $40.2 million have been exported to the CARs through the Iran corridor, supported by the relaxation of financial instrument requirements for seasonal exports.
Authorities have also permitted limited re-export of transit cargo, exempted certain humanitarian shipments, and eased trade conditions for both imports and exports through Iran and the Central Asian Republics for a specified timeframe.
In a significant development, diplomatic and coordination meetings have been conducted with China, Kazakhstan, and Kyrgyzstan under the Quadrilateral Traffic in Transit Agreement (QTTA) framework to enhance trade routes and incorporate Uzbekistan and Tajikistan into the network.
The broader regional logistics landscape has been further complicated by geopolitical tensions affecting Iran and the Gulf, leading to disruptions in sea and air freight routes and increased shipping costs.
Trade with Gulf Cooperation Council (GCC) countries displayed mixed trends. Imports from GCC nations increased by 2.9 percent to $13.57 billion in July-April FY2025-26, buoyed by growth from Saudi Arabia, the United Arab Emirates, and Oman, despite declines from Qatar, Kuwait, and Bahrain. However, monthly data revealed volatility with sharp fluctuations in March and April, reflecting shifts in logistics routes and recovery in shipping operations.
To counter these challenges, the government has expanded freighter flight services, reduced airport handling charges on exports, renegotiated air freight rates with GCC carriers, and rerouted some shipping through regional ports in Oman and Saudi Arabia. Additionally, a high-level committee has been established to evaluate the impact on global trade flows, while ongoing consultations with private sector stakeholders and GCC countries continue.
Officials emphasized Pakistan’s strategic focus on diversifying export markets, optimizing logistics costs via land and sea routes, and strengthening long-term shipping partnerships to stabilize and enhance regional trade flows amid ongoing disruptions.
