For six decades, Pakistan’s maritime ports served as a primary lifeline for landlocked Afghanistan. Karachi and Port Qasim became essential to Afghanistan’s trade. Through the Afghanistan-Pakistan Transit Trade Agreement (APTTA) and the twin arteries of Torkham and Chaman, Pakistan governed how goods moved duty-free from ships to trucks.

It is imperative to mention that Pakistani ports on the Arabian Sea offer the shortest and most cost-effective overland route for Afghan imports. Fuel, construction materials, pharmaceutical products, wheat and other essential goods important to Afghanistan entered the country through these southern corridors. 

Additionally, Afghan agricultural exports, such as fresh and dried fruits, relied on swift passage through these ports to reach global buyers. As a result, Afghan merchants depended immensely on Pakistani customs infrastructure.

Afghanistan’s terrain, along with its sanctioned neighbours, has presented Kabul with a difficult situation, thus giving Islamabad some economic leverage over Kabul through its trade arrangements.

The consistent border closures and port blockades by Pakistan, arising from differences between the two nations, have been major factors in stifling Afghan markets, resulting in sudden inflation and shortages. Following Pakistan’s open declaration of war on Afghanistan in late February 2026, and airstrikes on Kabul, Kandahar and Bagram under Operation Ghazab Lil Haq, the principal corridor through which Afghan trade reached the sea was closed.

Additionally, the rift between Kabul and Islamabad has widened, driven by Afghanistan’s reluctance to acknowledge the Durand Line and Pakistan’s accusation that Kabul is harbouring Tehrik-i-Taliban Pakistan (TTP) militants.

Given these developments, Afghanistan has sought to limit or reduce its structural vulnerability by moving trade through Iran’s Chabahar Port and Central Asian corridors. Kabul is realigning Afghanistan’s external economic geography by looking towards Iran, Central Asia, China and India.

The consequences for Pakistan extend well beyond lost transit fees. They affect Khyber Pakhtunkhwa’s industrial base, Islamabad’s regional leverage over Kabul, and the long-term viability of Gwadar as a competitor to Iran’s Chabahar.

The Collapse in Numbers

According to various reports, bilateral commerce between Pakistan and Afghanistan contracted from approximately $2.46 billion in 2024 to $1.77 billion in 2025, while border closures in October 2025 further exacerbated the decline.

Afghanistan fell out of Pakistan’s list of leading export destinations by December of FY2025-26. This was a stark reversal for a market that had previously ranked eighth among Pakistan’s top export destinations. Pakistani exports to Afghanistan had risen 31 percent year-on-year to $1.3 billion in FY25, but more than halved in the first six months of FY26 alone, falling from $754 million to $336 million.

Transit trade has also been affected drastically. Container traffic through Pakistan bound for, or originating in, Afghanistan reached a record 102,886 containers worth $6.7 billion in FY23. By FY26, the number had collapsed to 11,592 containers. This decline was noted by the World Bank’s Afghanistan Economic Monitor and reported by Dawn newspaper. The value of Afghan exports transiting through Pakistan fell from more than $454 million in FY25 to roughly $7 million in FY26.

Importantly, perishable agriculture illustrates the human cost on both sides of the border. Five southern Afghan provinces exported 44,225 tonnes of grapes worth $13.8 million in 2025, with nearly 43,000 tonnes going to Pakistan.

In 2026, trade collapsed to 256 tonnes.

Pakistani trade organisations forecast that nine months of closure cost Pakistani traders more than Rs 280 billion and Afghan traders over Rs 140 billion, affecting more than 10,000 livelihoods, with Pakistan’s export growth rate falling from 4.5 percent to 1.5 percent.

Growing Focus on Iran's Chabahar

The World Bank’s Afghanistan Economic Monitor found that Iran accounted for 31.3 percent of Afghan imports in FY25, rising to 48.6 percent once goods transiting through Iranian territory are included.

There is a growing focus on Chabahar Port, Iran’s only deep-water oceanic port, located approximately 170 kilometres west of Gwadar and explicitly promoted by India as a bypass of Pakistani territory since the trilateral India-Iran-Afghanistan transit agreement of May 2016.

Afghan officials have urged India to scale up utilisation of the port. Afghan Commerce Minister Nooruddin Azizi raised the issue directly with India’s Minister of State for Commerce Jitin Prasada in New Delhi in November 2025. Iran provided up to 49 percent of all goods imported by Afghanistan in 2025. India and Iran use Chabahar Port to send goods to Afghanistan without going through Pakistan.

In September 2025, the US revoked Chabahar’s special exception from sanctions. As a result, India had to negotiate a six-month waiver, which expired in April 2026 amid the US-Iran military standoff, despite New Delhi paying $120 million in port investment amid criticism at home for buckling to American pressure.

Ports and Maritime Organisation head Ali-Akbar Safaei, writing as Bazrpash in Iranian state media, stated that “Chabahar… can act as a focal point in the transit development of the region… India’s access to Afghanistan and Central Asia, Turkey, Azerbaijan and Europe through Chabahar Port will be facilitated.”

The planned 750-kilometre Chabahar-Zahedan railway, intended to link the port to Iran’s national network and the International North-South Transport Corridor towards Russia and Europe, remains under construction. However, its completion would give Afghanistan and Central Asia a maritime alternative largely insulated from Pakistani chokepoints.

The Central Asian Pivot

Uzbekistan and Afghanistan signed a Preferential Trade Agreement in 2025 that came into effect on October 1. The agreement eliminated import duties on fourteen categories of goods.

According to reports, bilateral trade turnover reached approximately $1.5-$1.68 billion in 2025, marking a 53 percent increase over the previous year and more than two-and-a-half times the $653 million recorded in 2021.

Uzbek Deputy Prime Minister Jamshid Khodjaev has stated that, since the February 2026 video conference with Afghan officials, the two sides intend to lift bilateral turnover to $5 billion, building on earlier agreements worth $300-$514 million covering eight categories of Afghan exports and six categories of Uzbek goods, signed on the sidelines of business forums in Kabul and Tashkent.

Afghan Commerce Minister Nooruddin Azizi described Uzbekistan as “a reliable partner in trade and investment…”

Since the partnership, Afghan exports via Turkmenistan’s Torghundi crossing have more than doubled, while Kyrgyzstan and Tajikistan have inaugurated a key segment of the CASA-1000 electricity transmission project, designed to export Central Asian hydropower to Afghanistan and Pakistan alike.

Senior Taliban officials have urged Afghan traders and investors to wind up their activities in Pakistan and pursue opportunities in Central Asia instead.

Beijing’s Calculated Courtship

China has sought a dual-track approach. It has increased its commercial and mineral footprint in Afghanistan while simultaneously working to patch up the Kabul-Islamabad relationship. This may be because an unstable periphery is likely to threaten the China-Pakistan Economic Corridor (CPEC).

In August 2025, Chinese Foreign Minister Wang Yi convened a trilateral meeting in Kabul with Afghan and Pakistani counterparts, focusing on extending CPEC’s $60 billion project umbrella into Afghanistan.

Annual China-Afghanistan trade has reached roughly $1 billion, according to Afghan Foreign Minister Amir Khan Muttaqi, who has requested balanced trade, expanded banking relations and new transport links.

Wang Yi further added: “China attaches importance to advancing key cooperation projects with Afghanistan… China will import more quality specialty products from Afghanistan and continue to provide support and assistance within its capacity for Afghanistan’s reconstruction.”

Beijing has clearly indicated its intent to start “practical mining activities” in Afghanistan’s mineral-rich north within the year, building on the 25-year, $540 million Amu Darya oil extraction contract signed with CPEIC in January 2023 and a further $350 million pledged by the Fan China Afghan Mining Processing and Trading Company across power generation, cement production and public health.

These developments present an uncomfortable situation for Islamabad. While China is Pakistan’s most important patron, it is also actively engaging the Taliban with investment that Pakistan cannot match, while viewing regional stability as a primary consideration.

Pakistan's Loss of Leverage

The economic damage to Pakistan extends beyond the loss of customs revenue. Peshawar has been the main trade gateway for goods heading to Afghanistan, including cement, food, medicines, textiles and consumer products. As Afghan demand for Pakistani imports falls, businesses already struggling with high energy, transport and financing costs are losing a crucial export market.

Pakistan has, for decades, enjoyed its position as the main trade corridor between South and Central Asia. However, its deteriorating relations with Afghanistan have challenged this strategic position as Afghans seek alternative routes such as Iran’s Chabahar Port, Turkmenistan’s Torghundi crossing and emerging China-linked corridors.

A Transforming Relationship

As Kabul shifts its trade away from Pakistani routes, it is likely to incur higher transport costs, longer transit times and greater logistical risks for Afghan traders. According to RFE/RL, despite Kabul’s choice of alternative routes, Afghanistan’s major infrastructure projects still rely heavily on eventual cooperation with Pakistan. The relationship is therefore transforming rather than being entirely severed.

Afghanistan’s diversification is an aggregate outcome of cumulative events, including repeated Pakistani border closures and the widening security rift between the Taliban and Islamabad.

Iran’s Chabahar corridor, Uzbekistan’s preferential trade regime, Turkmenistan’s Torghundi crossing, CASA-1000’s regional power grid, and China’s mineral and CPEC aspirations highlight the many credible alternatives available to Kabul. 

For Pakistan, the decline of Afghan dependency puts its regional leverage in jeopardy as competitors from Tehran to Tashkent to Beijing move to fill the vacuum.

(The writer is the Co-Founder of The Strategic Perspective and an independent researcher and analyst specialising in Af-Pak affairs, counterterrorism and regional security. The views expressed are personal.)