Afghanistan's Trade Takes Sharp Turn: Pakistan's Loss, Iran's Gain in Key Transit Routes

Afghanistan's transit trade through Pakistan has crashed by a massive 93%, plummeting from $5 billion in 2021 to just $367 million in the past fiscal year (FY26). This dramatic drop comes as Kabul deliberately shifts its trade routes towards Iran and Central Asian nations, fundamentally reshaping regional commerce and geopolitical dynamics. The move marks one of the sharpest declines in recent history, reducing container traffic from nearly 89,000 to just 11,592. The collapse stems from a mix of deteriorating political ties between Afghanistan and Pakistan, marked by border closures and security concerns, alongside a strategic push by the Taliban government to reduce its reliance on Pakistani ports. Pakistan closed its border in October 2025 due to security issues, adding to the pressure. In response, Iran has offered attractive incentives and facilities at its Chabahar Port, making it a more appealing gateway for Afghan goods. This shift has, however, brought economic costs for Afghanistan, including higher transport and logistics expenses, which are being passed on to consumers as increased inflationary pressure. The ongoing trade redirection is set to have lasting effects on regional economies and employment, particularly impacting communities along the traditional Afghanistan-Pakistan border. While Pakistan reopened its ports for Afghan goods in January 2026 after a months-long suspension, the long-term trend of diversification by Kabul continues. The World Food Programme reported in June 2026 that Iran now handles about 60% of Afghanistan's trade, leading to a 10% rise in basic food basket costs between October 2025 and April 2026. Afghanistan is also actively exploring deeper trade ties with India, leveraging alternative routes like Chabahar Port to bypass Pakistan.