Pakistan’s Trade Map Shifts as Business with Afghanistan Slumps, Imports from Kazakhstan Surge

DID Press: Pakistan is seeking to strengthen its trade position with five Central Asian countries, but new data point to sharp volatility and mounting structural challenges in Islamabad’s regional trade strategy. According to a report by Dawn, trade with Afghanistan suffered an unprecedented slump in the second half of 2025, with Pakistani exports falling from $505 million to $219 million. The downturn followed repeated border closures triggered by a surge in militant activity in May 2025.

By contrast, Kazakhstan has emerged as Pakistan’s leading regional trade partner. Pakistani imports from Kazakhstan—particularly crude oil, wheat and pulses—have quadrupled, while Pakistan’s exports to Kazakhstan have declined and remain largely confined to potatoes and textiles. Both countries have set a target of expanding bilateral trade to $1 billion.

At the geoeconomic level, Pakistan faces a growing strategic challenge from the International North–South Transport Corridor (INSTC), which links India, Iran and Russia. The corridor is estimated to be around 30% cheaper and 40% shorter than routes via the Suez Canal. The development of Chabahar Port and the Kazakhstan–Turkmenistan–Iran rail link has created alternative transit pathways that effectively bypass Pakistan.

Regional connectivity has been further strained by military tensions between India and Pakistan in May 2025, which led to airspace closures and deepened regional mistrust, slowing transit cooperation.

The report concludes that for Pakistan to evolve from a “regional aspirant” into a “genuine transit hub,” Islamabad must manage political disputes with neighbors, ensure stability and predictability at borders and customs, and diversify its export basket beyond traditional commodities.