Afghanistan’s transit trade through Pakistan declined by a staggering 60% in fiscal year 2024–25, from $2.408 billion the year prior to $974 million, according to official data from Pakistan Customs.
The steep fall signals a substantial contraction in transit trade between the two neighboring nations, hinting at shifting trade dynamics. According to analysts, the drop results from geopolitical uncertainty, tighter regulations, and a possible rerouting of cargo through alternative corridors.
Despite the significant annual decline, however, monthly data suggests a tentative recovery. May 2025 saw transit trade rise 21% year-on-year, going from $72 million in May 2024 to $87 million this year. On a month-on-month basis, the increase was 13%, climbing from $77 million in April 2025.
In contrast to the decline in transit trade, overall bilateral trade between the neighboring states increased by 25% in FY2024–25, reaching $1.998 billion against $1.603 billion in fiscal year 2023-24. This surge has been attributed to a 31% increase—from $1.065 billion to $1.391 billion—in Pakistan’s exports to Afghanistan, indicating a growing appetite for Pakistani goods across the border. Imports from Afghanistan also rose by 13%, reaching $607 million against $539 million the year prior.
Late Surge
Bilateral trade saw its best results in the last quarter (April-June) of FY2024-25, as Pakistan’s exports to Afghanistan rose 24% year-on-year to $340 million against $275 million in the fourth quarter of the previous fiscal year. Total bilateral trade in the quarter hit $423 million, a 17% year-on-year and 5% quarter-on-quarter increase. Analysts say the rebound reflects renewed trade momentum, supported by targeted facilitation measures and increased substitution of Indian goods in Afghan markets.
“The final quarter’s performance was critical in lifting annual export growth to 31%, despite subdued activity earlier in the year,” said a senior trade official. “This demonstrates sustained commercial engagement and improved logistical facilitation between the two countries,” he added.
However, trade experts warn that while encouraging, the surge in the last quarter require consistent policy support, smoother border operations, and geopolitical stability in the region. With Afghanistan exploring alternate transit routes and Pakistan desiring a stronger position as a regional trade hub, the next few months could prove critical in determining the long-term trajectory of trade ties.