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.

Experts at the Confederation of Indian Industry (CII) Amritsar Zonal Council meeting highlighted the potential of air exports of farm produce to strengthen Indo-Afghan trade and support regional economic growth.

The session focused on Sri Guru Ram Dass International Airport, which last year handled just 972 metric tonnes of exports and 236 tonnes of imports, far below its capacity. Stakeholders noted delays caused by limited aircraft, short customs hours, and holidays.

Former Indian ambassador Navdeep Suri praised the session as the “finest granular interaction on trade” he had seen among Indian business chambers and proposed an Amritsar-Kabul-Dubai trade axis with frequent wide-bodied flights.

RahatCargo MD Sunil Kohli agreed to underwrite 1,500-1,800 tonnes of weekly cargo, provided swift clearances and suitable flights.

CII leaders emphasized that expanding perishable exports, textiles, pharmaceuticals, and value-added goods could become a major economic boost for the region, but required better coordination between airlines, customs, and airport authorities.

In November last year, an Indian foreign ministry official announced that air cargo services between India and Afghanistan will be launched soon.

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.