Border Closures Between Pakistan and Afghanistan Impact Trade and Economy

The border between Pakistan and Afghanistan is currently closed, causing economic and humanitarian issues between the two countries. The Khyber Chamber of Commerce and Industry stated that a prolonged closure of the Torkham crossing had caused an estimated $2.5 billion in losses to Pakistan alone, including $1.64 billion in exports and $817 million in imports. Trade between the two countries has seen steep declines, with transit trade volumes plummeting from nearly 89,000 containers valued at USD 5 billion before 2021.

The border closures are severely impacting the transit trade between Pakistan and Afghanistan. The decline in trade volumes is noted to be a culmination of a strategy by the Afghan Taliban to reduce Afghanistan's dependence on Pakistani ports. The higher transport and logistics costs are ultimately passed on to consumers, adding to inflationary pressure.