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Pakistan-Afghanistan trade shrinks to $1 billion amid border disruptions and policy uncertainty

Trade experts and business leaders are urging both Islamabad and Kabul to adopt consistent and transparent trade policies

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The annual trade volume between Pakistan and Afghanistan has dropped sharply from $2.5 billion to just $1 billion, as ongoing border closures and inconsistent trade policies continue to strain economic ties between the two neighbors.

Zia-ul-Haq Sarhadi, Vice President of the Pakistan-Afghanistan Joint Chamber of Commerce, described the decline as “deeply concerning,” warning that Pakistan’s broader regional trade ambitions, including access to Central Asian markets, depend on a stable trading relationship with Afghanistan.

For years, Pakistan has exported essential goods to Afghanistan, including cement, steel bars, pharmaceuticals, vegetables, flour, and sugar, while importing fresh produce and other agricultural products in return.

However, persistent challenges and growing diplomatic friction between the two countries have disrupted this exchange.

A key flashpoint occurred in February when heightened tensions prompted a closure of the Pakistan-Afghanistan border.
The shutdown halted the movement of goods and people, causing significant losses in tax revenues for both nations and stalling cross-border commerce.

“The impact wasn’t just on trade numbers,” Sarhadi noted. “From Karachi’s ports to the Torkham crossing, thousands of laborers and transport workers were left jobless for days. The ripple effects hurt the most vulnerable segments of society.”

Trade experts and business leaders are urging both Islamabad and Kabul to adopt consistent and transparent trade policies, emphasizing that long-term economic cooperation is vital not only for mutual economic benefit but also for fostering regional peace and stability.

They warn that without a sustained diplomatic and economic dialogue, both countries risk further isolation and economic stagnation, especially at a time when the region faces broader geopolitical and security challenges.

 

 

 

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‘Made in Afghanistan’ expo opens in Tashkent

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The Afghanistan Chamber of Commerce and Investment has announced that a major exhibition of Afghan products titled “Made in Afghanistan” is opening today (Wednesday) in Uzbekistan’s capital Tashkent.

According to the chamber, the expo—supported financially by the United Nations Development Programme—will run until Friday and aims to showcase Afghanistan’s production and export potential.

More than 60 booths have been set up by Afghan traders, featuring a wide range of products including carpets, dried and fresh fruits, saffron, pine nuts, cotton, precious and semi-precious stones, as well as beverages.

Officials from the chamber expressed hope that the expo will help expand trade relations between Afghanistan and countries in the region, particularly Uzbekistan.

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Afghani strengthens nearly 10% against US dollar amid banking sector reforms

The bank said it has expanded oversight of financial institutions and private lenders, improving transparency and promoting more consistent standards across the sector.

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Afghanistan’s central bank, Da Afghanistan Bank, says the national currency has appreciated by 9.93% against the US dollar during the year 1404, citing steady progress in the country’s financial and banking systems.

Officials attributed the gains to cautious monetary policies that have helped stabilise the Afghani against major global currencies while also boosting its value against the dollar.

The bank said it has expanded oversight of financial institutions and private lenders, improving transparency and promoting more consistent standards across the sector.

As part of efforts to better manage liquidity, authorities also collected and destroyed worn-out banknotes in circulation. At the same time, officials reported growth in electronic banking, with digital payment usage rising in recent months.

Central bank spokesperson Haseebullah Noori said initiatives are underway to broaden access to banking services nationwide, including the wider rollout of Islamic banking options.

Analysts welcomed the stabilisation efforts but stressed the need to address ongoing challenges facing domestic banks, including the impact of international financial sanctions on Afghanistan.

They added that expanding Islamic banking could help draw more savings into the formal financial system, noting that a significant share of personal wealth remains outside banks. Bringing those funds into the sector, they said, could inject billions of Afghanis into the economy and further support financial stability.

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Uzbekistan delivers over 290 tons of aid to Afghanistan

The assistance, provided ahead of Eid al-Fitr, is intended to support vulnerable communities while reinforcing ties between the neighboring countries.

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Uzbekistan has delivered more than 290 tons of humanitarian aid to Afghanistan, according to the country’s Ministry of Foreign Affairs.

The assistance, provided ahead of Eid al-Fitr, is intended to support vulnerable communities while reinforcing ties between the neighboring countries.

The shipment includes essential food supplies such as flour, rice, wheat, vegetable oil, instant meals, pasta, and confectionery. An official handover ceremony was held in the border town of Hairatan.

Local officials, including Balkh province representatives and authorities from Hairatan, expressed appreciation for the continued support, acknowledging Uzbekistan’s efforts to assist the Afghan people.

Among those present at the ceremony were Uzbekistan’s Ambassador to Afghanistan, Oybek Usmanov, and Surkhandarya regional governor Ulugbek Kosimov.

The aid delivery underscores Uzbekistan’s ongoing humanitarian engagement and its broader efforts to promote regional cooperation and stability.

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