Transit trade between Pakistan-Afghanistan dropped 59% in 2023-24: Here’s why

ISLAMABAD: During the fiscal year 2023-24, the transit trade between Pakistan and Afghanistan decreased significantly by 59%.

As per the details, Afghan imports from Pakistan have decreased substantially due to the federal government’s measures to curb smuggling on transit corridors. A decrease of $4.21 billion in fiscal year 2023-24.

Afghan transit trade volume during this period was $2.89 billion, down from $7.95 billion in the previous fiscal year (2022-23). The decline continued into the first month of the new fiscal year, with July 2024 seeing an 83 percent year-on-year decline in trade, down from $583 million in July 2023 to just $9.8 million.

According to Ahmad Jawad, Central Vice President of Pakistan Business Forum (PBF), the trade volume between Pakistan and Afghanistan decreased from $1.5-$2 billion from 2010 to 2020 to only $870 million in 2020. However, 2023 saw a slight recovery in bilateral trade, to around $1.8 billion, driven by increased Afghan exports to Pakistan, particularly coal.

Despite this small recovery, the balance of trade has shifted heavily in Afghanistan’s Favor. During this period, Pakistan’s imports from Afghanistan increased by 62.7 percent while its exports decreased by 200 percent. This situation is driven by basic strategic, security and political factors.