Economic Impact of the Pak-Afghan Border Closure
The closure of the Pakistan-Afghanistan border has had a significant economic impact, with an estimated loss of $200 million in the initial 24 days. This closure has not only disrupted bilateral trade but also affected Pakistan’s trade with Central Asian states, resulting in millions of dollars in losses per day.
During the first 20 days, from October 12 to October 31, the closure of border crossings caused over $50 million in direct losses, according to an official source. The official mentioned that after clashes on October 11, Pakistan closed all eight border crossing points with Afghanistan, leaving thousands of traders stranded and goods worth millions stuck. Perishable goods began to rot, and stakeholders called for dialogue. Crossings remained closed for more than two weeks; by early November, the closure had lasted 24 days, causing estimated losses near $200 million. Afghanistan normally imports about $150 million monthly from Pakistan and exports $60 million.
Effects on Trade and Economy
The closures halted not only bilateral trade but also Pakistani exports to Central Asia. Traders reported daily losses of millions of dollars, with long queues of vehicles carrying hundreds of tons of perishable goods. With both sides accusing each other of harboring militants, the crisis underscored how security and trade are intertwined.
Twenty days of crossing closures inflicted over $50 million in direct losses, affecting 20,000-25,000 workers and leaving more than 1,000 trucks stranded at Karachi port. Afghan agricultural prices collapsed: a 10kg box of grapes that once sold for 4,500 Pakistani rupees now fetched only 120-140 Afghanis, causing millions in losses.
Market Reactions and Investor Confidence
Investor confidence improved when Pakistan and Afghanistan extended the ceasefire, the source said. On October 31, Pakistan’s KSE 100-index surged 3.13% (4,898 points) as investors anticipated stability; market analysts attributed the rally to news that both sides agreed to maintain the truce and establish a monitoring mechanism.
Notably, on October 15, Pakistan had stopped the processing of Afghanistan transit consignments owing to the closure of the Pak-Afghan border in order to avoid further accumulation of cargoes at crossing points as 584 transit vehicles were either parked in the border areas or were en-route towards the crossing points.
Decline in Bilateral Trade
It is also worth noting that Pakistan-Afghanistan bilateral trade had declined by 6 percent to $475 million during the first quarter—July to September—of FY2025-26 as compared to $502 million during the same period in FY2024-25. On a year-on-year basis, too, Pakistan-Afghanistan bilateral goods trade declined by 13 percent in September 2025 to $177 million, from $204 million in September 2024.
Key Statistics and Trends
- Estimated Losses:$200 million in the first 24 days of closure.
- Daily Losses:Millions of dollars due to halted trade.
- Traders Affected:20,000-25,000 workers impacted.
- Stranded Trucks:Over 1,000 trucks at Karachi port.
- Afghan Agricultural Prices:Collapse in grape prices, leading to significant losses.
- Market Response:KSE 100-index surge of 3.13% following ceasefire extension.
- Bilateral Trade Decline:6% drop in Q1 FY2025-26 to $475 million.
- Year-on-Year Decline:13% decrease in September 2025 to $177 million.