Saturday, March 29, 2025
Pakistan–Afghanistan Conflict Costs Islamabad Billions, Border Closure Deals Major Blow to Shehbaz Sharif’s Economy
Islamabad | December 17, 2025
The escalating tensions between Pakistan and Afghanistan have inflicted massive economic damage on Pakistan, with losses running into billions of dollars. According to the Pakistan–Afghanistan Joint Chamber of Commerce and Industry (PAJCCI), the prolonged closure of border trade routes has already cost Pakistan more than $4.5 billion, severely hurting the country’s fragile economy under Prime Minister Shehbaz Sharif.
Relations between the two neighbours have deteriorated sharply in recent weeks, with the situation resembling a war-like standoff. Pakistan carried out multiple airstrikes inside Taliban-ruled Afghanistan, following which Islamabad decided to suspend cross-border trade. The move was intended to economically pressure the Taliban regime, but the impact has largely backfired on Pakistan itself.
PAJCCI stated that the shutdown of border crossings has disrupted one of the most important regional trade corridors. Pakistani media, quoting the chamber, reported that during peak agricultural and manufacturing seasons, Pakistan’s daily exports to Afghanistan typically range between $50 million and $60 million. With trade frozen, exporters and traders are bearing heavy losses.
The chamber further warned that if the current situation continues, Pakistan could suffer an additional $200 million loss between December and March, particularly due to disruptions in seasonal exports such as oranges and potatoes.
Pakistan has accused fighters of the Tehreek-e-Taliban Pakistan (TTP) of launching terrorist attacks from Afghan soil. Several Pakistani soldiers and civilians have reportedly been killed in these attacks. Citing security concerns, Pakistan closed all trade routes with Afghanistan nearly two months ago, triggering strong retaliation from Kabul.
In response, the Islamic Emirate of Afghanistan (IEA) also suspended trade with Pakistan and urged Afghan traders and industrialists to shift to alternative trade routes. Afghan officials said repeated border closures and the politicisation of trade and humanitarian issues left them with no choice but to take reciprocal action.
Pakistan’s leading daily Dawn, quoting PAJCCI, reported that the shutdown has almost dismantled a key trade corridor worth billions of dollars annually. Before the closure, bilateral trade between Pakistan and Afghanistan stood at around $2–3 billion per year. Pakistan exported high-value goods, while Afghanistan depended on Pakistan for essential supplies and exported agricultural produce in return.
Now, Pakistan finds itself facing a serious economic setback. While India has already reduced Pakistan’s trade opportunities over the years, Afghanistan’s suspension of trade has added another major blow, compounding Islamabad’s economic challenges.
With no immediate resolution in sight, experts warn that continued hostilities and trade disruptions could further destabilise Pakistan’s economy at a time when it can least afford additional shocks.
