Business
Sharp drop in exports to Afghanistan drives Pakistan’s trade deficit surge
Meanwhile, Afghanistan is actively seeking alternative trade routes and partnerships to reduce future reliance on Pakistan’s commercial channels and strengthen its economic independence.
Recent data from Pakistan’s central bank reveals that a sharp decline in exports to Afghanistan has become a key factor behind the country’s growing trade deficit, challenging previous claims by Pakistani officials that halting trade with Afghanistan would not harm their economy.
According to the State Bank of Pakistan, the trade deficit with nine neighboring countries increased by more than 39 percent in the first five months of the 2025–2026 fiscal year, rising from $4.4 billion to $6.2 billion. The report highlights that reduced exports to countries such as China and Afghanistan played a central role in this increase.
Exports from Pakistan to Afghanistan fell dramatically by over 94 percent during this period, dropping from $408 million last year to approximately $210 million. Economic analysts note that Afghanistan has historically been one of Pakistan’s key export markets, particularly for food items, cement, medicine, and daily-use goods—products that cannot be easily replaced.
The steep decline follows the complete suspension of trade between the two countries in October 2025. Despite previous statements by Pakistani officials asserting that reduced or halted trade with Afghanistan would not negatively impact Pakistan’s economy, the latest figures suggest otherwise.
Meanwhile, Afghanistan is actively seeking alternative trade routes and partnerships to reduce future reliance on Pakistan’s commercial channels and strengthen its economic independence.
Business
UNHCR launches largest carpet-weaving centre in western Afghanistan
Over the past year, some 2 million Afghans have returned from Iran, highlighting the urgent need for economic opportunities, especially for women, said UNHCR.
The UNHCR, in collaboration with the Islamic Development Bank, on Wednesday inaugurated the largest carpet-weaving center in western Afghanistan’s Herat province.
The initiative, attended by UN Deputy Special Representative Indrika Ratwatte and local community leaders, will support 400 returnees, with more than three-quarters of them women, providing livelihoods and skills training.
The centre aims to empower returnees and host communities, helping them rebuild sustainable livelihoods, a priority need identified by Afghans returning from Iran.
Over the past year, some 2 million Afghans have returned from Iran, highlighting the urgent need for economic opportunities, especially for women, said UNHCR.
Uzbekistan’s President Shavkat Mirziyoyev has officially ratified the Preferential Trade Agreement (PTA) between Uzbekistan and Afghanistan.
The agreement was first signed on 10 June 2025 during the Tashkent International Investment Forum by Uzbekistan’s Minister of Investment and Foreign Trade Laziz Kudratov and Afghanistan’s Minister Nuriddin Azizi, Uzbekistan Daily reported.
The PTA eliminates tariffs on 14 categories of goods, simplifies the issuance of phytosanitary permits for Afghan agricultural products, and introduces additional support measures for Uzbek exporters.
In February 2026, Uzbekistan’s Deputy Prime Minister Jamshid Khodjaev held online talks with Azizi to accelerate the agreement’s entry into force, advance investment projects, and promote industrial cooperation. A new joint business forum is planned to take place in Kabul after the conclusion of Ramadan.
The agreement is expected to strengthen bilateral trade, boost economic ties, and create new opportunities for Afghan businesses and exporters.
Afghanistan is preparing to increase exports of fruits and vegetables to Russia following a temporary ban by Iran on food exports, Russian media reported citing Rustam Khabibullin, head of the Russian Business Center in Afghanistan.
On March 3, the Iranian government announced an indefinite suspension of all food and agricultural exports to prioritize domestic food security amid ongoing regional conflict. Goods that were previously destined for Russian retailers are now being redirected to Iranian state reserves.
In response, Afghanistan has already dispatched its first shipment of 100 tons of apples to Russia. Shipments of peppers, dried fruits, nuts, celery, zucchini, eggplant, citrus, berries, herbs, and melons are being prepared for delivery in the coming weeks. Khabibullin noted that demand from Russia is growing, and Afghan exporters aim to meet the rising requests to prevent shortages and stabilize prices for consumers.
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