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Afghanistan and Iran usher in new trade chapter after railway link inaugurated

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The Herat-Khawaf railway line, a major infrastructural project between Afghanistan and Iran, was officially inaugurated in the presence of the presidents of both countries, via video link, on Thursday.

For Afghanistan this was an historic moment as the railway line will open a new chapter in trade not only with Iran but also with other regional countries, Europe and the rest of the world.

The railway link is seen as an important step in regional cooperation, in addition to being a way to strengthen economic ties and relations between Afghanistan and Iran.

In his speech, President Ashraf Ghani said he had hoped to attend the inauguration in person but due to COVID-19 restrictions he was not able to.

Ghani said however that the railway line was a critically important project, not only for Afghanistan and Iran but also for the region and beyond.

“The opening of the Khawaf-Herat railway is a great step for the development and economic leap of Iran and Afghanistan,” Ghani said.

He said railway transport is the most efficient, important and cheapest means of transporting goods in Asia.

Iranian President Hassan Rouhani in turn said the opening of the Khawaf-Herat railway line strengthens Afghanistan-Iran ties.

Rouhani said that through this railway link, Afghanistan will be connected to European countries.

“With the Herat-Khawaf railway line, Afghanistan will be connected to European countries and also soon will be connected to the Chabahar railway line,” Rouhani added.

Atta Nasib, Head of Afghanistan Investment Facilitation Unit said that this will help turn Afghanistan into a transit hub.

“This railway between Afghanistan and Iran is a major economic and strategic achievement for both countries, which will connect us to European countries,” said Nasib.

Yamma Shams, General Director of Afghanistan Railway Authority said that it is estimated that eventually Khawaf-Herat railway line will carry 1,600 passengers a day.

The railway line cost $100 million dollars to build and currently spans 130 km in total – 70 km in Iran and 60 km in Afghanistan.

This railway line is strategically important as it gives Afghanistan easy access to Iranian ports at Chabahar and Bandar Abbas, as it connects into Iran’s existing railway grid.

Construction of the railway began in April 2007 and was due to finish in 2009, but was delayed.

However, last week a trial run was held and the first consignment of goods imported from Iran, including 500 tons of cement, successfully arrived in the country.

According to the reports Iran’s exports to Afghanistan are projected to reach $2.7 billion by March next year.

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Pakistan’s kinno exports falter as tensions with Afghanistan continue

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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.

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Pezeshkian pledges to facilitate Iran-Afghanistan trade

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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.

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Afghanistan-Kazakhstan banking ties discussed in Kabul meeting

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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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