Afghanistan, CA countries: PAJCCI chief urges govt to resolve trade crisis immediately

KARACHI: President of the Pak-Afghan Joint Chamber of Commerce and Industry (PAJCCI), Junaid Makda, urgently calls on the government to take immediate action to resolve the worsening trade crisis with Afghanistan and Central Asian countries.

Makda emphasised that rising trade barriers, increasing transportation costs, and the ongoing Torkham Border closure are severely damaging cross-border business and causing significant losses to Pakistan’s economy.

Makda reiterated concerns raised during the Special Investment Facilitation Council (SIFC) meeting in December 2024.

He explained that SROs No 1397(I)/2023, 1380(I)/2023, 1401(I)/2023, and 1402(I)/2023, issued in October 2023, triggered a sharp decline in trade and strained relations with neighboring countries. Although the Khyber Pakhtunkhwa government recently reduced the Infrastructure Development Cess from 2% to 1%, it is still applied to both forward and reverse transit trade with Afghanistan —discouraging legitimate business and violating international commitments.

“Reducing Infrastructure Development Cess to 1% is a small relief, but transit trade should not be taxed at all,” Makda stated.

“This tax, combined with the border closure, is pushing traders to use Iranian ports instead of Pakistani routes, causing long-term harm to our trade network.”

Despite PAJCCI’s ongoing efforts, the situation has worsened. Transportation costs have spiked following the National Logistics Cell’s (NLC) intervention; however, under the TIR Convention, the NLC is actively contributing to trade facilitation, which is a positive aspect. Meanwhile, the Torkham Border has been closed since February 21, 2025, due to a dispute over Afghan border post construction.

This closure has completely halted trade, stranding over 5,000 trucks carrying goods, including perishable items, resulting in significant financial losses. The prolonged closure has also diverted business to competing routes like 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 scaring away investors,” Sarhadi cautioned. “The government must take action now, or Pakistan risks losing its position as a key trade hub.”

Makda highlighted that under international protocols, Pakistan has a responsibility to facilitate trade for landlocked countries like Afghanistan. Failing to meet these obligations not only damages Pakistan’s global reputation but also gives an edge to regional competitors, with Indian ports already capturing diverted trade.

While PAJCCI fully supports and endorses national security measures being taken by the forces, Makda emphasized the need to balance security with trade facilitation.

He urged the government to implement necessary actions on border management, lower transportation costs, and eliminate IDC on transit trade to help businesses survive.

“The Prime Minister’s efforts to strengthen ties with Uzbekistan are a step in the right direction,” Makda added. “But if trade obstacles are not addressed quickly, Pakistan will miss the opportunity to become a major trade corridor and unlock massive economic potential.”

PAJCCI calls on the government to act without delay. Every passing day costs Pakistan valuable trade, investor trust, and economic stability.

Copyright Business Recorder, 2025