Afghanistan shifts trade to Iran route to avoid Pakistan closures

People wait near the closed gate at the Spin Boldak border crossing with Pakistan, after the border was closed following clashes between Afghan and Pakistani forces, in Kandahar province, Afghanistan, on October 23, 2025. (AP/File)
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Updated 15 November 2025
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Afghanistan shifts trade to Iran route to avoid Pakistan closures

  • Iran offers steep discounts at its port of Chabahar
  • Central Asia routes grow faster than Pakistan corridor

KABUL: Landlocked Afghanistan is leaning more heavily on trade routes through Iran and Central Asia to reduce dependence on Pakistan, officials said, as tension between the neighbors escalates, with their border closed in recent weeks.

Afghanistan’s reliance on Pakistan’s ports has long given Islamabad leverage to press Kabul over Pakistani militants sheltering across the border.

But Afghanistan is increasingly making use of Iran’s concessions to shift freight to its Indian-backed port of Chabahar, bypassing Pakistan and avoiding recurring border and transit disruptions.

“In the past six months, our trade with Iran has reached $1.6 billion, higher than the $1.1 billion exchanged with Pakistan,” Abdul Salam Jawad Akhundzada, a spokesman for the commerce ministry, told Reuters.

“The facilities at Chabahar have reduced delays and given traders confidence that shipments will not stop when borders close.”

THREE-MONTH DEADLINE

Traders have three months to settle contracts in Pakistan and shift to other routes, said Mullah Abdul Ghani Baradar, Afghanistan’s deputy prime minister for economic affairs.

Accusing Islamabad of using “commercial and humanitarian matters as political leverage,” he said Afghanistan would not mediate disputes after the deadline and ordered ministries to stop clearing Pakistani medicines, citing “low-quality” imports.

The biggest shift is to Chabahar, used since 2017 under a transit pact with Iran and India. Afghan officials say incentives from tariff cuts and discounted storage to faster handling are drawing more cargo south.

Iran has installed updated equipment and X-ray scanners, while offering Afghan cargo a 30 percent cut in port tariffs, 75 percent off storage fees and 55 percent off docking charges, said Akhundzada, the commerce ministry spokesman.

PAKISTAN SEES NO HARM FROM AFGHAN DECISION

Afghanistan’s decision would cause no economic harm to Pakistan, Defense Minister Khawaja Asif told Geo News.

“Afghanistan can trade through any port or country,” he said.

However, Commerce Minister Jam Kamal Khan told Reuters, “We cannot compromise on security.”

India has stepped up engagement with Afghanistan’s ruling Taliban, hosting acting foreign minister Amir Khan Muttaqi and broadening humanitarian assistance.

It runs key terminals at Chabahar, which it sees as a strategic link to Afghanistan and Central Asia. In October, the United States gave New Delhi a six-month sanctions waiver to keep running the port.

CENTRAL ASIA CORRIDORS EXPAND

Afghanistan has boosted shipments through Turkmenistan, Uzbekistan and Tajikistan, routes it says are growing faster than Pakistan’s.

As advantages Akhundzada cited new transit deals, lower border costs and offices at Milak and Zahedan, Iran’s main border crossing points for Afghan trade.

But Pakistan is still the fastest route to the sea, with trucks reaching its southern port of Karachi in three days. Its exports to Afghanistan neared $1.5 billion in 2024.

Islamabad says closures curb militant movement; Kabul denies providing safe haven to the militants.


US says trade with Pakistan could top $8 billion in 2025

Updated 20 January 2026
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US says trade with Pakistan could top $8 billion in 2025

  • US chargé d’affaires links rising trade to deeper economic engagement with Pakistan
  • Visit comes amid broader effort by Islamabad and Washington to improve bilateral ties 

ISLAMABAD: Trade between the United States and Pakistan is projected to exceed $8 billion in 2025, the US Embassy said on Tuesday, as Washington signaled confidence in Pakistan’s export base and economic potential during a high-profile visit to the industrial city of Sialkot.

The projection was highlighted by US Chargé d’Affaires Natalie A. Baker during meetings with Pakistani exporters and business leaders, underlining the importance Washington places on trade, investment and supply-chain cooperation as the two countries seek to stabilize and expand their economic relationship.

“Highlighting the growth in trade between the United States and Pakistan, which was projected to reach over $8 billion in 2025, Baker said, ‘Expanding trade reflects a strong foundation that highlights the positive impact of US economic engagement in Pakistan and globally. The United States and Pakistan are pursuing a fair and balanced trade relationship that creates prosperity for both our nations’,” the US embassy said in a statement.

The envoy said the United States had been Pakistan’s largest export market and a leading investor, presenting significant opportunities for expanded trade and shared prosperity. 

“The United States remains deeply invested in Pakistan and its people,” Baker said, “building on a partnership that dates back to Pakistan’s independence and continues to grow through trade, innovation, education, and cultural exchange.”

The visit comes amid a broader effort by Islamabad and Washington to improve bilateral ties under US President Donald Trump’s second term, after years of uneven engagement. Since mid-2025, the two sides have stepped up diplomatic contacts, including meetings between Prime Minister Shehbaz Sharif, Pakistan’s military leadership and US officials, alongside discussions on trade, minerals, security cooperation and regional stability.

Pakistan has also sought to re-energize economic diplomacy with Washington as it works to boost exports, attract foreign investment and stabilize its economy under an IMF-backed reform program. 

In July 2025, the two countries agreed to a bilateral trade deal that included reciprocal tariff reductions and frameworks for US investment in Pakistan’s energy and mineral sectors, a step Islamabad has hailed as opening new avenues for economic collaboration.

During her visit, Baker toured leading exporters including Forward Sports, First American Corporation (FAC) and CA Sports, companies that are deeply embedded in global supply chains. The embassy said nearly 70 percent of FAC’s exports go to the United States, illustrating sustained US consumer demand for Pakistani-made goods.

Baker also visited Sialkot International Airport and met with the leadership of AirSial, highlighting private-sector-led infrastructure and logistics as key to Pakistan’s export growth.