KARACHI: President of the Pak-Afghan Joint Chamber of Commerce and Industry (PAJCCI) Junaid Makda has urged the government to take immediate action to resolve the worsening trade crisis with Afghanistan and Central Asian countries (CIS).
In a statement on Friday, Makda highlighted that rising trade barriers, increasing transportation costs and the prolonged closure of the Torkham Border are severely disrupting cross-border business and causing significant losses to Pakistan’s economy.
He reiterated concerns raised during the Special Investment Facilitation Council (SIFC) meeting in December 2024, pointing to the negative impact of SROs No 1397(I)/2023, 1380(I)/2023, 1401(I)/2023, and 1402(I)/2023, issued in October 2023. These regulations, he explained, have led to a sharp decline in trade and strained relations with neighbouring countries. While the Khyber Pakhtunkhwa government recently reduced the infrastructure development cess (IDC) from 2.0 per cent to 1.0 per cent, it remains applicable to both forward and reverse transit trade with Afghanistan -- discouraging legitimate business and violating international commitments.
“Reducing IDC to 1.0 per cent is a small relief, but transit trade should not be taxed at all,” Makda stated. “This tax, combined with the border closure, is forcing traders to use Iranian ports instead of Pakistani routes, causing long-term damage to our trade network.”
Despite the PAJCCI’s continuous efforts, the situation has deteriorated further. Transportation costs have surged following the National Logistics Cell’s (NLC) intervention. However, under the TIR Convention, NLC has played a role in trade facilitation, which is a positive development. Meanwhile, the Torkham Border has remained closed since 21 February 2025 due to a dispute over Afghan border post construction. The closure has brought trade to a standstill, leaving over 5,000 trucks carrying goods -- including perishable items -- stranded, resulting in significant financial losses. The prolonged shutdown has also diverted business to competing trade routes such as Chabahar and Bandar Abbas.
PAJCCI Senior Vice President Zia-ul-Haq Sarhadi and Vice President Pervez Lala expressed deep concern for small and medium-sized enterprises (SMEs). “Long delays and uncertainty are destroying trader confidence and deterring investors,” Sarhadi warned. “The government must act now, or Pakistan risks losing its position as a key trade hub.”
Makda stressed that under international protocols, Pakistan has an obligation to facilitate trade for landlocked countries like Afghanistan. Failure to meet these commitments not only harms Pakistan’s global reputation but also gives regional competitors an advantage, with Indian ports already capturing diverted trade.
While the PAJCCI fully supports national security measures, Makda emphasised the need for a balanced approach that ensures both security and trade facilitation. He urged the government to improve border management, reduce transportation costs and eliminate IDC on transit trade to support struggling businesses.
“The prime minister’s efforts to strengthen ties with Uzbekistan are a step in the right direction,” Makda noted. “But if trade obstacles are not addressed swiftly, Pakistan will miss the opportunity to become a major trade corridor and unlock its full economic potential.”