PAKISTAN’S current transit trade with Afghanistan, once seen as a vital link for regional connectivity, has sharply deteriorated. In the first eight months of 2024-25 fiscal, transit trade plunged 66 per cent, falling from $2.24 billion to $754 million, while anti-smuggling measures pushed the decline to 84pc in the opening months of the year. These numbers reveal the extent to which the Afghan Transit Trade (ATT) system had been exploited for smuggling, with studies estimating that up to 40pc of goods meant for Afghanistan used to be re-routed back into Pakistan, causing an annual revenue loss of $2-3 billion.

Overall, illicit trade drains nearly Rs3.4 trillion from Pakistan’s economy each year, with transit misuse forming a major part of this loss. A course correction is surely overdue. Pakistan must shift to a trans-parent, technology-driven transit regime built on digital tracking, bonded carriers, end-use audits, and closer customs co-ordination with the regime in Kabul.

Such reforms will not only curb revenue losses, but also restore confidence in a system crucial for regional trade. As things stand currently, transit trade should serve economic cooperation, not fuel smuggling, distort markets, or strain bilateral ties.

Sadam Hussain
Larkana

Published in Dawn, December 11th, 2025