Bilateral trade between Pakistan and Afghanistan declined sharply by 53 percent during the first half of the current fiscal year (July–December 2025–26), falling from $1.26 billion to $594 million, according to a report by Pakistani newspaper The Nation.

The steep drop is largely attributed to the closure of key crossings following clashes on October 11, which disrupted trade flows between the two neighboring countries.

During the period under review, Pakistan’s exports to Afghanistan fell by 55 percent, dropping from $754 million to $336 million. Imports from Afghanistan also registered a significant decline, falling by 49 percent to $258 million.

Earlier, Afghanistan’s Deputy Prime Minister for Economic Affairs, Mullah Abdul Ghani Baradar, said the country had expanded economic engagement with other regional partners amid the crossing closures. He stressed that trade with Pakistan would resume only if permanent assurances were provided to keep trade routes open.

The sharp contraction underscores growing strains in Pakistan–Afghanistan trade relations and highlights the economic impact of prolonged crossing disruptions.

Bank Alfalah Limited (BAFL), one of Pakistan’s largest commercial banks, has advanced its planned exit from Afghanistan following regulatory approvals from both the State Bank of Pakistan (SBP) and Da Afghanistan Bank (DAB), allowing Ghazanfar Bank to begin due diligence on the acquisition.

The bank informed the Pakistan Stock Exchange (PSX) of the development on Tuesday, Pakistan’s Business Recorder reported.

In the notice, BAFL referred to its earlier letter dated December 4, 2025, regarding the non-binding offer received from Ghazanfar Bank, Afghanistan, to acquire BAFL’s operations in the country.

The SBP has granted its in-principle approval for Ghazanfar Bank to start due diligence, and the Central Bank of Afghanistan has provided a similar clearance. As a result, BAFL will permit Ghazanfar Bank to proceed with the process.

Junaid Altaf, President of the Sarhad Chamber of Commerce and Industry (SCCI), has warned that the prolonged closure of Afghanistan ports is inflicting massive financial losses on traders and severely disrupting bilateral and transit trade.

Speaking during an executive committee meeting of the SCCI, chaired by him, Junaid Altaf said more than 12,000 containers linked to Pak-Afghan and transit trade are currently stranded at Karachi Port, forcing traders to bear heavy demurrage and detention charges. He added that the situation has exhausted the liquidity of clearing agents and bonded carriers, while foreign shipping lines continue to accumulate charges.

The meeting was attended by senior office-bearers, executive committee members, traders, industrialists, importers and exporters, who discussed in detail the continued closure of the crossings. Participants unanimously expressed concern over the adverse impact of the shutdown on trade and employment.

Traders noted that the prolonged closure has disrupted perishable exports, increased unemployment and caused serious socio-economic hardship for communities near the Durand Line that depend heavily on trade. According to stakeholders, millions of dollars are being lost daily due to container detention, while billions of rupees remain blocked in bank guarantees and container security deposits.

The forum emphasized that the issue should be resolved through dialogue, urging authorities on both sides to resume bilateral and transit trade to prevent further economic damage. While acknowledging the gravity of internal and external security challenges, the executive committee maintained that there would be no compromise on national security and peace.

However, the SCCI stressed that reopening trade routes is crucial for economic stability, growth and the continuity of business, commercial and industrial activities. The forum called on relevant authorities to address the matter on a priority basis and find a sustainable solution through negotiations.

Trade between Afghanistan and Pakistan remains suspended since clashes between the two countries on October 11 last year.