PESHAWAR: The Khyber Pakhtunkhwa government has raised alarm over the prolonged closure of Pakistan-Afghanistan border trade, warning the federal government that the shutdown is inflicting heavy revenue losses and triggering job cuts across the province.
In a letter to Federal Commerce Minister Jam Kamal, KP’s Adviser on Finance Muzzammil Aslam said cross-border commerce had “effectively come to a halt,” worsening Pakistan’s already fragile economic outlook marked by falling exports, slower growth, and rising unemployment.
Aslam highlighted an “alarming” 80 percent decline in collections of the Infrastructure Development Cess, a levy tied directly to border trade. He attached a letter from the Khyber Pakhtunkhwa Revenue Authority (KPRA) detailing the sharp drop in tax receipts, underscoring broader fiscal challenges. He urged the federal government to convene a high-level meeting of stakeholders to assess the impact and provide relief to exporters and traders.
Border closure and deadlock
The main crossings with Afghanistan have remained shut for regular trade and transit since October 10, 2025, after deadly clashes along the frontier and reports of Pakistani airstrikes. Islamabad linked the escalation to demands that Kabul act against militants accused of launching attacks from Afghan soil, a claim the Taliban rejected.
Although a ceasefire was discussed in talks hosted by Qatar and Turkey and was reported to be holding, trade has not resumed. Negotiations remain stalled as both sides continue to blame each other for the impasse.
In December, Pakistan allowed a limited humanitarian exception for UN relief containers to enter Afghanistan but maintained the wider closure for commercial activity.
Fresh attempts to break the deadlock have emerged, with Pakistan and Afghanistan agreeing to form a 13-member joint committee to hold formal negotiations at Torkham. The committee aims to ease border-management issues and restore cross-border trade.
This standoff has placed mounting pressure on provincial finances and livelihoods in KP, where cross-border commerce plays a critical role in sustaining local economies.
