Pakistan-Afghanistan trade falls 6% to $475 million in first quarter of FY2025-26

Bilateral trade between Pakistan and Afghanistan declined by 6 percent during the first quarter of Pakistan’s 2025–26 fiscal year, totaling $475 million, compared to $502 million in the same period of 2024–25, according to official data.

Pakistan’s The Nation reported that on a year-on-year basis, trade between the two neighbors also dropped by 13 percent in September 2025, reaching $177 million, down from $204 million in September 2024.
Exports decline, imports rise

Pakistan’s exports to Afghanistan saw a notable decline of 15 percent, falling from $320 million to $271 million during the July–September period. Officials attributed the drop to reduced demand and supply chain challenges.

In contrast, Pakistan’s imports from Afghanistan increased by 12 percent, rising from $182 million to $203 million, suggesting stronger Afghan export activity and higher demand for Afghan goods in Pakistan.

As a result, Pakistan’s trade surplus with Afghanistan narrowed, driven primarily by the sharper fall in exports relative to overall trade volume.

Monthly and yearly trends

On a year-on-year (YoY) basis, Pakistan’s exports to Afghanistan dropped sharply by 36 percent, from $128 million to $81 million, while imports from Afghanistan grew 26 percent, from $76 million to $96 million.

Month-on-month, total trade grew 19 percent, from $149 million in August to $177 million in September 2025.

During that same period, Pakistan’s exports fell 8 percent, while imports surged 56 percent, reflecting a widening shift in trade dynamics.
Export performance by category

Despite the overall decline, several key Pakistani export categories saw strong growth during the first quarter of FY2025-26:

Prepared animal fodder and oil cakes: up 557%, from $0.7 million to $4.59 million
Fruits and vegetables (mainly mangoes): up 140%, from $9.22 million to $22.10 million
Animal or vegetable fats and oils: up 72%, from $6.14 million to $10.58 million
Cement: up 41%, from $20.65 million to $29.06 million
Wood and articles: up 29%, from $9.52 million to $12.32 million
Plastics and articles: up 42%, from $5.07 million to $7.19 million
Pharmaceutical products: up 10%, from $40.61 million to $44.68 million
Declining exports
Several traditional export commodities, however, experienced steep declines.
Sugar exports dropped 100%, from $69.75 million to zero
Malt extract: down 84%, from $7.51 million to $1.22 million
Tractors: down 61%, from $3.63 million to $1.41 million
Miscellaneous edible food preparations: down 53%, from $13.89 million to $6.47 million
Rice: down 21%, from $64.11 million to $50.55 million

Trade outlook

Economists note that while Afghan exports to Pakistan are rising, the drop in Pakistan’s exports could reflect supply disruptions, pricing pressures, or evolving trade routes following new customs and transit policies.

Bilateral trade between the two countries has historically fluctuated due to border closures, political tensions, and shifting regional logistics networks. However, both Islamabad and Kabul have expressed interest in stabilizing trade flows through new mechanisms under the Afghanistan–Pakistan Transit Trade Agreement (APTTA) and expanded regional connectivity initiatives.