Pakistan-Afghanistan border closure causes billions in losses, deals major blow to KP trade and economy

Khyber Pakhtunkhwa [Pakistan], January 12 (ANI): The extended blockade of trade corridors between Pakistan and Afghanistan for more than three months has caused enormous economic damage worth billions of rupees at national and regional levels, business representatives stated on Sunday, as noted by a Dawn news report.
They said the halt of cross-border trade had badly hit exports, mutual commerce, transport firms and state revenues, delivering a serious setback to the country's overall economy, especially to Khyber Pakhtunkhwa, where traders heavily relied on commerce with Afghanistan.
These remarks were shared by senior vice-president of the Pakistan-Afghanistan Joint Chamber of Commerce and Industry, Ziaul Haq Sarhadi, and Sarhad Chamber of Commerce and Industry member Manzoor Ellahi in a joint press statement.
They said Khyber Pakhtunkhwa had suffered more than other provinces because of its closeness to Afghanistan, deep ethnic and trade connections, and strong dependence on cross-border business. Over 90 per cent of Pakistan's exports to Afghanistan moved through Khyber Pakhtunkhwa Customs facilities, mainly via the Torkham crossing, they added.
According to the businessmen, the province faced estimated export losses of PKR 2.5 billion due to stopped consignments of goods such as cement, textiles, medicines, construction items and farm products. Besides, Khyber Pakhtunkhwa lost nearly PKR 2.5 billion in revenue in the first five months of the present fiscal year because of reduced trade activity and lower customs income.
They said exporters in the province were bearing losses of more than USD 4 million each day, with stranded merchandise worth billions of rupees. Perishable items rotted, while medicines and raw materials expired, causing irreparable financial damage, Dawn reported.
They added that Afghan transit trade to Central Asia, which earlier involved 4,000 to 5,000 consignments yearly, had declined sharply, hurting the logistics and transport sectors and related income in the province.
Pointing to wider economic effects, the businessmen warned that continued border closure was leading to factory shutdowns and job losses. They said up to 90 per cent of Khyber Pakhtunkhwa's industrial sector depended on Afghan markets for imports and exports, and ongoing disruption could trigger widespread plant closures, huge unemployment and increased regional instability amid rising economic hardship.
Referring to the transport and labour sectors, they said thousands of truck drivers, workers and daily wagers in border regions had lost their livelihoods, while business in markets across Peshawar and other cities had slowed sharply. Farmers and traders also suffered huge losses due to the decay of fruits, vegetables and other perishable items.
They warned that long-term impacts could be harsher, as Afghanistan kept diverting trade to Iran and Central Asian states, possibly causing permanent loss of markets for Khyber Pakhtunkhwa-based traders.
Quoting a recent report, they said Pakistan-Afghanistan bilateral trade fell by 53 per cent year-on-year, dropping to USD 594 million in the first half of the ongoing fiscal year (2025-26) from USD 1.26 billion in the same period of the previous year, mainly due to the closure of border crossings.
The closure continues to have a damaging impact on businesses, revenue, employment, and stability across the region, according to the Dawn report. (ANI)