Business
Afghanistan’s trade diversification challenges Pakistan
The disruption affects both sides of the border, including farmers, transporters, commission agents, wholesalers and retailers.
Five years after the Islamic Emirate of Afghanistan (IEA) returned to power in Kabul, Afghanistan’s economic relationship with Pakistan is undergoing a structural shift. For Khyber-Pakhtunkhwa, particularly Peshawar, the issue is increasingly one of industrial resilience and competitiveness.
The clearest evidence is Afghanistan’s transit trade through Pakistan. Container traffic reached a record 102,886 containers worth $6.7 billion in Fiscal Year 2023 (FY23), but fell to 54,114 in FY24 and 42,959 in FY25. In FY26, it collapsed to just 11,592 containers valued at $367 million, according to customs data cited by Dawn.
The figures indicate that Pakistan’s October 2025 border restrictions accelerated a decline that had already begun.
Afghanistan has increasingly diversified its trade routes, with Iran emerging as a major alternative. The World Bank’s Afghanistan Economic Monitor says the Iranian corridor has become a key part of the country’s import supply chain.
In FY25, Iran accounted for 31.3 percent of Afghan imports, while direct imports from Iran and goods transiting through Iran together represented 48.6 percent. Central Asian routes are also gaining importance.
For Pakistan, the loss extends beyond transit fees. It risks losing its traditional position as Afghanistan’s principal gateway to international markets.
The decline is also hitting businesses in Khyber-Pakhtunkhwa. For decades, Afghan demand supported manufacturers, wholesalers, transporters, clearing agents and warehouses linking Karachi’s ports with Peshawar and the border markets.
Cement, construction materials, food products, pharmaceuticals, textiles and consumer goods have traditionally found markets in Afghanistan. As Afghan orders decline, manufacturers face lower demand while already dealing with high energy, financing and transport costs, Dawn reported.
Agriculture is particularly vulnerable because fruits and vegetables cannot withstand prolonged border delays. In 2025, five southern Afghan provinces exported 44,225 tonnes of grapes worth $13.8 million, with nearly 43,000 tonnes going to Pakistan. So far in 2026, exports have fallen to just 256 tonnes valued at about $100,000, according to the Associated Press.
The disruption affects both sides of the border, including farmers, transporters, commission agents, wholesalers and retailers.
At the centre of the issue is the Afghanistan-Pakistan Transit Trade Agreement, designed to give Afghanistan access to Pakistani seaports while offering Pakistan a potential trade corridor to Central Asia. But security concerns, smuggling, regulatory disputes and political tensions have steadily weakened the arrangement.
Pakistan has legitimate concerns about transit cargo being diverted into its domestic market, while Afghan traders face higher costs and uncertainty from additional requirements, inspections and border delays.
If alternative routes through Iran and Central Asia become commercially viable, traders have an incentive to establish new supply chains – and winning that business back could prove difficult.
The consequences are particularly serious for Khyber-Pakhtunkhwa, where Peshawar’s commercial ecosystem has long depended on trade with Afghanistan and Central Asia.
The Pak-Afghan Joint Chamber of Commerce and Industry estimates Pakistani exporters suffered around $225 million in losses over eight months this year because of restrictions and blockades. It puts annual Pakistani exports to Afghanistan at around $1.5 billion and exports to Central Asian markets through Afghanistan at about $800 million.
Pakistan therefore cannot treat the decline in Afghan transit trade solely as a security or diplomatic issue.
Business
Russia-Afghanistan trade surges 150% in first seven months of 2026
Russia’s main exports to Afghanistan include natural gas, petrol, diesel, wheat, wheat flour, sunflower oil and other agricultural products.
Trade between Afghanistan and Russia increased by 150 percent in the first seven months of 2026 compared with the same period last year, according to figures released on October 7.
Russian Deputy Prime Minister Alexei Overchuk and Afghanistan’s Foreign Minister Amir Khan Muttaqi discussed expanding bilateral cooperation in trade, energy, investment and transport, as well as strengthening ties between businesses in the two countries.
The talks also focused on developing the International North-South Transport Corridor, which could strengthen Afghanistan’s role as a regional transit route and improve its access to markets in Central Asia and beyond.
The proposed Trans-Afghan railway could further enhance Afghanistan’s position as a regional transit hub. Kazakhstan, Uzbekistan and the United Arab Emirates recently signed a memorandum of understanding on the project, which is estimated to cost about $5 billion and take around five years to complete.
Russian customs data shows that bilateral trade reached about $326 million in 2025, while Afghan figures put the total at approximately $590 million. Both sides, however, reported that trade had doubled compared with 2024.
Russia’s main exports to Afghanistan include natural gas, petrol, diesel, wheat, wheat flour, sunflower oil and other agricultural products.
Afghanistan’s exports to Russia remain considerably smaller, at about $4 million, and consist mainly of fresh and dried fruit, including raisins, dried apricots, pomegranates, grapes, apples and cherries. Other exports include cotton, watermelons, medicinal plants and some mineral products.
If the current growth rate continues, bilateral trade based on Russian statistics could reach approximately $815 million in 2026.
Officials say improved transport links and stronger business-to-business cooperation could further expand economic ties between Afghanistan and Russia.
Business
Afghan products attract Saudi buyers at major food expo in Jeddah
At two international exhibitions last year, Afghan businesses supported by the programme secured more than $25 million in trade prospects.
Five Afghan businesses showcased a range of Afghanistan’s well-known agricultural and food products at the Saudi Food Show 2026 in Jeddah, Saudi Arabia, with their products attracting strong interest from Saudi buyers.
The expo was held from September 27 to 29, 2026, providing Afghan companies with an opportunity to connect directly with buyers, distributors and representatives of major retail chains.
The businesses presented dried fruits, nuts, spices, pomegranate juice and fruit concentrates, highlighting Afghanistan’s potential in the agricultural and food export sector.
Their participation was supported through the Afghanistan Community Resilience Programme, funded by the European Union and jointly implemented by UNDP, FAO, IOM and UNODC. The programme focuses on strengthening vulnerable Afghan families and communities affected by the ban on poppy cultivation, climate change and displacement, particularly in Kandahar, Helmand and Badghis.
According to UNDP, the programme works with Afghan businesses to access national and international markets, helping create demand for legal agricultural products and supporting farmers, processors and rural workers.
At two international exhibitions last year, Afghan businesses supported by the programme secured more than $25 million in trade prospects.
UNDP also said that, over the past five years, it has supported more than 13,000 agribusinesses and farmers in reaching new markets, while helping facilitate the sale of more than 23,000 metric tonnes of agricultural produce.
The next major international expo is Annapoorna Inter Food in Mumbai, India, scheduled for December 9–11, where another eight to 10 Afghan businesses are expected to participate.
Business
Baradar opens Fifth Imam Abu Hanifa International Exhibition in Kabul
Hundreds of Afghan and foreign companies are participating in the seven-day exhibition, with around 600 booths showcasing products across various sectors, including food, medicines, dairy products, construction materials, handicrafts, carpets, plastics and iron products.
Mullah Abdul Ghani Baradar Akhund, the Islamic Emirate’s Deputy Prime Minister for Economic Affairs, on Wednesday inaugurated the Fifth General and International Imam Abu Hanifa (RA) Exhibition at the Afghanistan International Exhibition Center in Kabul.
Speaking at the opening ceremony, Baradar said the exhibition is an important platform for showcasing Afghanistan’s economic potential, supporting domestic production, expanding trade relations and strengthening direct commercial ties with the region.
He said Afghanistan’s agricultural, industrial and commercial products, including fresh and dried fruits, can help strengthen trade relations and open new regional and international markets for Afghan products.
“Trade relations and commercial ties among the countries of the region and the world are based on an important principle of trade, namely comparative and absolute advantages,” Baradar said.
He added that every country has comparative or absolute advantages in producing goods and products, which he described as a key driver of regional and international trade.
Baradar also said the Islamic Emirate is working to rebuild Afghanistan’s economic foundations despite limited resources.
“The Islamic Emirate of Afghanistan is not only completing unfinished chapters in the country’s economic growth and development, but has also, with limited resources, initiated new chapters in rebuilding the country’s economic foundations,” he said.
Baradar highlighted the opening of the Wakhan Economic and Trade Road, saying the route would strengthen Afghanistan’s role in regional trade and transit.
“The Wakhan Economic and Trade Road has been opened. This road connects China with European markets through Afghanistan via the shortest route and transforms Afghanistan into a major hub for regional transit and trade,” Baradar said.
He added that major infrastructure would gradually be developed along the route in addition to generating transit revenues.
Baradar further said the Islamic Emirate’s efforts to improve regional connectivity are aimed at transforming Afghanistan’s borders into centers of economic cooperation.
“We are transforming our borders from points of threat into points of connection for strategic economic cooperation,” he said, describing regional connectivity as one of the Islamic Emirate’s top priorities.
Meanwhile, Nooruddin Azizi, the Minister of Industry and Commerce, called for mutually beneficial foreign investment in Afghanistan. He said the Islamic Emirate will not allow the country’s raw minerals to be exported in the future.
Hundreds of Afghan and foreign companies are participating in the seven-day exhibition, with around 600 booths showcasing products across various sectors, including food, medicines, dairy products, construction materials, handicrafts, carpets, plastics and iron products.
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