Business
ADB report states 70% of Afghan transit trade diverted through Iran
The Asian Development Bank (ADB) said in a recent report that although Afghanistan has traditionally relied on Pakistan as a gateway to international shipping routes, recent trends indicate that 70 percent of Afghan transit trade is now diverted through Iran.
The ADB’s Corridor Performance Measurement and Monitoring (CPMM) Annual Report 2019, published this week, stated that Pakistan is still facing challenges in terms of removing barriers for road transport.
This shift away from Pakistan has been driven by lower costs from foreign ports and more attractive security deposit and detention tariffs for transit containers from shipping lines that operate at Iran’s seaports.
The report stated that in addition, diesel fuel in Iran ($0.06 per liter) is significantly less expensive than in Pakistan ($0.86 per liter), which provides an additional edge in terms of cost competitiveness.
Also, in the absence of a formal agreement with Pakistan, shippers and carriers face uncertainty in transit procedures, it added.
The report further stated that the CPMM trade facilitation indicator (TFIs) reported longer average border-crossing time, although relatively unchanged average border-crossing cost.
Total average transport cost showed an improvement, but both measures of speeds showed that trucks did not move as fast compared to 2018. The average border-crossing time between Afghanistan and Pakistan increased to 38.2 hours.
The time to cross Chaman was 60.1 hours, ranked as the most time-consuming border crossing point in 2019.
Peshawar took 45.8 hours and ranked the third most time-consuming, the report stated.
These samples were estimated from commercial shipments carrying goods destined for Afghanistan as well as Central Asia.
Following the approval of its National Transport Policy in 2018, Pakistan embarked on a series of reforms and initiatives to address structural inefficiencies and impediments, to increase exports through lowering cost and lead time of transportation.
The report recommended the implementation of the national single-window system and port community system (PCS) to reduce cargo dwell time in seaports.
It said better parking area design and queuing systems could improve efficiency and speed up border crossing.
Pakistan does not yet have a domestic regulation on the international carriage of goods on road, which is a fundamental condition to implement the Carriage of Goods by Road (CMR).
The report also stated that greater adoption of freight on rail and inland waterways would reduce freight costs and boost low-unit value exports such as agricultural produce.
Afghanistan and Pakistan have however reactivated talks on the Afghanistan–Pakistan Transit Trade Agreement 2010, which aims to attract transit from Central Asia to seaports south of Pakistan, the report stated.
Pakistan’s kinno exports remain far below potential as regional tensions, high freight costs and weak government support continue to choke the citrus trade.
Despite being a leading global citrus producer, Pakistan is expected to export just 400,000–450,000 tonnes of kinno in the 2025–26 season, compared with an estimated capacity of 700,000–800,000 tonnes.
Exports in 2024–25 stood at around 350,000–400,000 tonnes, mainly to Russia, the UAE, Saudi Arabia, Afghanistan, Indonesia and Central Asia. While better fruit quality this season has raised hopes, persistent crossing disruptions—especially with Afghanistan—and transport bottlenecks have offset gains.
Growers say prices have collapsed sharply, forcing panic sales. Rates for large kinno have fallen from over Rs120 per kg early in the season to as low as Rs75, while smaller fruit is selling for Rs35–40 per kg amid weak demand.
Industry leaders warn the crisis is crippling processing units and jobs. More than 100 factories reportedly failed to open this season, with dozens more shutting down as exports stall. Cold storages in Sargodha are nearly full, putting fruit worth millions of dollars at risk of spoilage, while growers fear losses of up to Rs10 billion.
Exporters are urging the government to urgently resolve issues, subsidise logistics, and help access alternative markets, warning that prolonged inaction could devastate farmers, workers and the wider economy.
Iranian President Masoud Pezeshkian has said that Tehran will facilitate trade and economic exchanges with Afghanistan, including easing procedures at customs and local marketplaces.
He made the remarks during a televised interview following his visit to South Khorasan province, which shares a border with Afghanistan.
Pezeshkian, in a separate event addressing local business leaders, highlighted the province’s strategic advantages, citing its rich mineral resources, proximity to neighboring countries such as Afghanistan and Pakistan, and access to the ocean via the Chabahar port. He described the region as “a golden opportunity not found everywhere,” emphasizing its potential for economic growth and cross-border commerce.
A Kazakh delegation led by the Deputy Minister of Finance of Kazakhstan met with Sediqullah Khalid, First Deputy Governor of Da Afghanistan Bank, to discuss ways of strengthening banking and economic cooperation between the two countries.
According to a statement issued by Da Afghanistan Bank, Khalid said the central bank is keen to establish regular and effective banking relations with Kazakhstan as part of broader efforts to expand bilateral trade.
He noted that enhanced banking cooperation would help facilitate trade, investment, and wider economic interaction between Afghanistan and Kazakhstan, while also contributing to financial stability at the regional level.
Members of the Kazakh delegation also emphasized the importance of developing banking and economic ties and expressed their readiness to expand joint cooperation.
The two sides further agreed to establish technical committees from both countries to hold expert-level discussions and advance practical steps for cooperation.
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