Afghanistan dumps Pakistan trade amid conflict, turns to Iran and India

New Delhi: The Torkham border crossing, once a throbbing artery of trade between Pakistan and Afghanistan, has become a symbol of fractured ties. The gates of the border remain closed, and with it trade. The closure was triggered by Pakistan's attack on Afghanistan, the 2nd with its neighbour in this year. Pakistan's economy, already reeling from inflation and debt, stands to lose. Afghanistan absorbs about $2 billion annually in Pakistani exports, cement, pharmaceuticals, food staples, and textiles, making it Islamabad's third-largest market after the U.S. and China. Transit fees, millions of dollars of windfall from Central Asian and European cargo funneled through Pakistan's ports such as Karachi to Kabul, are evaporating.

Afghanistan is now accelerating a long-brewing pivot, rerouting commerce through Iran and India, and forging new economic lifelines that could reshape the region's trade dynamics. The decision marks a watershed. For decades, Pakistan dominated Afghanistan's trade, with imports through Karachi's port and crossings like Torkham, which it sought to use as leverage.

Annual bilateral trade hovered around over a billion dollars, but as the political ties deteriorate amid Pakistan's belligerence, Kabul is running out of patience. Earlier this month, Afghanistan's Deputy Prime Minister for Economic Affairs Office announced, “After three months, medicines imported from Pakistan should not be cleared, and no one should be given permission to import them.”

Over the past six months, Afghan-Iranian trade has surged to $1.626 billion, eclipsing the $1.108 billion with Pakistan, according to Afghanistan government data. Trade with Iran comes with linkages to the world as well, through the Chabahar Port. Developed with Indian support and investment, Chabahar offers a sanctions-resilient gateway to the Arabian Sea, bypassing Pakistan entirely. As India ties firm up, with its embassy in Kabul reopened and a fresh U.S. sanctions waiver for Chabahar in hand, New Delhi is ramping up exports of wheat and medicines, filling voids left by Pakistani suppliers.

Ariana Afghan Airlines is sweetening the pot, slashing cargo rates to Delhi at $1 per kilogram for exports, and ferrying pine nuts and rugs to Indian markets. "National traders can take advantage of this important opportunity to transport their commercial goods to various countries worldwide via Ariana cargo at lower costs and actively contribute to increasing the country's exports", a statement from the Airlines said.

Afghan businesses want more avenues of increasing trade. Jan Agha Nawid, spokesperson for the Afghanistan Chamber of Commerce and Investment (ACCI) , as quoted in Tolo News, said, “We urge the government to sign long-term agreements with neighboring countries to create more trade opportunities for Afghans. Preferential tariffs and reduced transportation and transit costs can help pave the way for broader trade relations.”

Last month, during a Delhi visit, Afghan Foreign Minister Amir Khan Muttaqi asked Indian investors to come to his country and announced the opening of cargo plane air connectivity between Delhi-Kabul, Amritsar-Kabul, and Amritsar-Kandahar that will help in the transfer of fresh fruits from Afghanistan to India. He backed the Chabahar port project, saying, "It is advantageous for us". This westward and eastward tilt extends to Central Asia-Turkmenistan, Uzbekistan and Tajikistan & beyond to Russia, China.

The big trade shift by Afghanistan comes even as Pakistan's economy remains beleaguered, surviving on IMF bailouts despite being in a region of large economies. India, one of the world's largest economies, had long back cut trading ties with Pakistan over Rawalpindi's support to cross border terrorism. From 26/11 terror attacks to Pahalgam terror attack, the linkages to all major terror attacks in India are in Pakistan