Pakistan exporters face heavy losses, costly detours as Afghanistan trade halt drags on

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PESHAWAR, Pakistan: A year after trade between Pakistan and Afghanistan was suspended, exporters are struggling with heavy losses, stranded goods and costly alternative routes to Central Asian markets.

Trade between the two countries was halted in October 2025 following deadly clashes along the Pakistan-Afghanistan border. 

Islamabad has accused militants based in Afghanistan of carrying out attacks in Pakistan, allegations that Kabul denies. 

Business groups estimate that more than US$2.5 billion in trade has been lost since then.

The suspension has hit Pakistan's pharmaceutical industry, which counts Afghanistan as its largest export market, along with businesses that rely on the country as a gateway to Central Asia.

EXPORTERS FACE LOSSES

At the Fedro Pharmaceuticals factory in Hayatabad, on the western outskirts of Peshawar, production continues but the company has had to rethink where to sell its medicines.

Around 70 per cent of the medicines packed at the factory were intended for Afghanistan and Central Asia.

Fedro chief executive Junaid Altaf said the border closure had left the company with orders it could no longer fulfil and packaging materials it could not use.

“When the border got closed, we already had orders. Some of the stock was ready, and some was still in process,” he told CNA, adding that the company had incurred heavy losses. 

“(Some) packaging was in Persian, in the Afghan language. For Russia and Uzbekistan, the packaging was in Russian. All that packaging got dumped.”

The factory is about 60km from the Torkham border crossing in Khyber Pakhtunkhwa province, which connects Pakistan with Afghanistan's Nangarhar province.

The crossing is a major gateway for goods moving between Pakistan, Afghanistan and Central Asian countries.

Fedro is now trying to increase domestic sales to make up for the disruption.

Food and agricultural exporters have also been hit, along with a network of workers and businesses involved in cross-border trade.

“It was shocking, not (only) for me but for everybody who was involved in the Afghanistan and Uzbekistan business, the Peshawar community, labour, customs clearance agents,” said Manzoor Ellahi, CEO and managing partner of MM Ellahi Traders, which exports rice, meat, citrus fruits and potatoes.

Before the suspension, Afghanistan and Central Asia accounted for 80 per cent of his company's revenue. That share has since fallen to 5 per cent.

LONGER ROUTES, HIGHER COSTS

With trade through key border crossings still halted, exporters like Ellahi have been looking for alternative routes to Central Asian markets, including through Iran, despite the higher costs and longer journeys.

At a truck depot in Hayatabad visited by CNA, business has ground to a halt. The facility previously handled 40 to 50 trucks a day carrying goods from Pakistan to Afghanistan.

The alternative route through Iran passes through Pakistan's Balochistan province, where security threats are high, and takes nearly six weeks.

"Previously, cargo via the Torkham border used to reach Uzbekistan in a week, costing between US$2,000 and US$3,000 in fees. Now, shipping via Iran costs around US$10,000 to US$13,000," said exporter Muhammad Naeem.

"If there is an item that has expired or something has spoiled, the only solution is to trash it," he added.

NO SIGN OF TRADE RESUMING

Islamabad has said trade will not resume unless Afghanistan's Taliban administration takes action against militants operating from its territory. 

Analysts warn that Pakistan's decision may prove counterproductive at a time when its overall trade gap continues to widen, and that the economy should not be politicised.

Vaqar Ahmed, research director at the Partnership for Economic Policy, an international economic research network, pointed to trade between China and India despite long-standing political and military tensions.

He also warned about Pakistan's export performance, saying the country needed to strengthen its foreign exchange reserves under an International Monetary Fund programme.

“The fact that Pakistan's exports are not picking up, it's very worrying,” he added.

“If this programme has to be successful, Pakistan's foreign exchange reserves need to be augmented.”

Pakistani business groups have called on Islamabad and Kabul to resolve their differences through talks, but there is little indication that the impasse will end soon.