In a significant move toward normalizing ties, Pakistan and Afghanistan on Wednesday signed a Preferential Trade Agreement (PTA), reducing tariffs on eight agricultural products.
The agreement was signed by senior commerce officials of both countries and aims to reduce customs duties on four Afghan exports to Pakistan—grapes, pomegranates, apples, tomatoes—and four Pakistani exports to Afghanistan—mangoes, kinnows, bananas and potatoes. Consequently, tariff rates on these items have been slashed from more than 60% to 27%.
“This agreement will be effective for a period of one year, commencing on Aug. 1, 2025,” read a statement of the Afghan Embassy in Pakistan. “It is renewable and also allows for the inclusion of additional items in the future,” it added.
“A significant step forward in Afg-Pak economic ties,” wrote Kabul’s Charge d’Affaires in Islamabad Sardar Shakeeb on X. “Delighted to witness the signing of the Preferential Trade Agreement between Afghanistan and Pakistan, reducing tariffs on key exports and opening doors for greater bilateral trade. A win for our farmers, traders, and shared prosperity,” he added.
Earlier this year, both Islamabad and Kabul had upgraded their diplomatic ties to ambassadorial status. Foreign Minister Ishaq Dar had said further upgrade of ties was possible after due diligence. A key barrier, however, is ongoing terrorism in Pakistan from Afghanistan, with Islamabad routinely urging the interim Afghan government to address.
Last week, Interior Minister Mohsin Naqvi visited Afghanistan and met various senior leaders, with both sides agreeing to bolster bilateral cooperation to curb terrorism and manage their shared border more effectively. Discussions, per a statement, focused on bilateral ties, with a particular focus on counterterrorism, cross-border infiltration, and the banned Tehreek-e-Taliban Pakistan (TTP).