In October 2025, when trucks came to a standstill at the Torkham border, it wasn’t just the movement of goods that ceased — it was the unraveling of trust. The closure, triggered by violent clashes and escalating tensions over cross-border terrorism linked to the Tehreek-i-Taliban Pakistan (TTP), brought bilateral trade between Pakistan and Afghanistan to a complete halt. Months later, the border remains shut, diplomatic channels depleted, and livelihoods across both countries in disarray. But beyond the surface of stalled shipments and lost revenues lies a deeper fracture: the erosion of commercial confidence between two economically interdependent neighbours.
Trade data reveals an unequal toll. Afghanistan’s exports have dropped by 10 percent since October, amounting to losses of $173 million — a devastating blow to an economy where every dollar is critical. Pakistan has suffered a larger numerical loss — $222.5 million — but this accounts for just 0.6 percent of its total exports. While Afghanistan bears the brunt economically, Pakistan risks paying a more profound price: a loss of regional influence, diminished relevance in transit trade, and a slow but steady erosion of long-term commercial dominance.
For years, Afghanistan has depended on Pakistan for access to markets and transit routes. Nearly 46 percent of its exports — many of them perishable goods — flowed through Pakistan, including shipments to India via the Wagah border. In 2024, fruits and vegetables made up 71 percent of Afghanistan’s total exports, with India emerging as a key destination. That fragile supply chain now hangs in limbo.
Zahir Khan, a fruit exporter based in Peshawar, shared how his shipments — worth tens of millions of rupees — had been immobilized for weeks. “Our fruit rotted at the checkpoint. This wasn’t just a business loss. It was betrayal,” he said. “Why should Afghan traders ever trust us again?”
That question now echoes in Islamabad’s policy circles. Though trade with Afghanistan accounts for just 3.46 percent of Pakistan’s exports, the broader strategic cost is far more serious. Over 90 percent of exports to Afghanistan pass through customs stations in Khyber Pakhtunkhwa (KP), meaning the freeze hits Punjab and KP industries hardest. Cement factories, pharmaceutical firms, and construction material suppliers are left with stockpiles of unsold goods. Confidence is waning — not just among Afghan importers, but among Pakistani exporters who fear the loss of a key, once-reliable market.
Even more concerning is the pace of Afghanistan’s pivot. Cement imports are now being rerouted via Iran, Uzbekistan, and Tajikistan. Pharmaceuticals are increasingly sourced from India, Turkey, and Iran. Pakistan still supplies an estimated 60–70 percent of Afghanistan’s pharmaceutical needs — but that foothold is visibly slipping. Afghan traders, once reliant on Pakistani ports and corridors, are steadily moving toward Iranian seaports and Central Asian supply chains, despite higher transportation costs.
Nothing reflects this shift more clearly than the steep drop in Afghan transit trade through Pakistan. From $6.7 billion in FY2023, the value of Afghan imports passing through Pakistani territory fell to $2.4 billion in FY2024 — and just $1 billion in FY2025. Without a resolution in sight, industry estimates suggest that figure could decline even further in FY2026. And once trade routes recalibrate and stabilize elsewhere, returning to the old patterns becomes increasingly unlikely.
This trend threatens not just Pakistan-Afghanistan relations, but Islamabad’s broader ambitions of becoming a regional trade and transit hub. Promising agreements with Tajikistan and Uzbekistan are now jeopardized. Cotton and coal shipments for Pakistani industries remain stranded, and textile units in Punjab considering relocation to Central Asia have postponed plans due to rising uncertainty.
The contrast is stark: Afghanistan, despite its isolation, is pushing for survival and diversification. Pakistan, meanwhile, is slowly losing both its strategic edge and its commercial leverage.
This isn’t the first time political tensions have disrupted Pakistan-Afghanistan trade — it happened in 1949, 1955, and 1961. But what makes the current crisis unique is a growing belief among Afghan traders that Pakistan can no longer be trusted as a stable economic partner. The damage, in their eyes, is not temporary — it’s structural.
Policymakers in Islamabad must grasp the real cost: not just lost revenue, but a tarnished reputation. In regional commerce, every delayed truck, every sudden closure, and every missed opportunity reinforces an image of volatility. And in trade, predictability is currency.
Reopening the border is necessary — but it won’t be sufficient. What’s needed is a complete reimagining of bilateral economic ties: a permanent, depoliticized commercial framework shielded from security disruptions. Business continuity protocols, shared customs oversight, and regional trade guarantees may seem ambitious, but they are now indispensable to restoring fractured trust.
In South Asia, where geopolitics often overshadows geoeconomics, one lesson is becoming clear: trade routes can be repaired — but trust, once broken, may never return.
