Afghanistan, Pakistan sign trade deal to slash tariffs on farm exports

Afghanistan and Pakistan have signed a Preferential Trade Agreement (PTA) to lower tariffs on key agricultural exports, aiming to boost cross-border trade and deepen economic ties.

The move marks a new chapter in the trade relationship between the two neighbors, which has often faced political and logistical challenges.

The agreement was signed earlier this week. Deputy Minister Mullah Ahmadullah Zahid represented Afghanistan’s Ministry of Industry and Commerce. Deputy Minister Jawad Paul signed on behalf of Pakistan’s Ministry of Commerce.

Both sides hailed the pact as a major step toward economic integration and shared prosperity.

Key tariff reductions

Under the PTA, tariffs will drop from more than 60% to 27% on eight major agricultural products.

Afghanistan will export grapes, pomegranates, apples, and tomatoes to Pakistan at lower rates. Pakistan will enjoy reduced tariffs on mangoes, kinnows (mandarins), bananas, and potatoes sent to Afghan markets.

The agreement takes effect August 1, 2025. It will run for one year but can be renewed. Both countries also plan to add more goods in future talks.

Trade in numbers

The two countries share a complicated trade history shaped by politics, geography, and security concerns. In 2024, bilateral trade stood at roughly USD 1.8 billion, according to regional estimates.

Experts believe that figure could double with better policies and infrastructure.

Agriculture drives much of the trade. Afghanistan exported nearly $150 million in fresh fruits and vegetables to Pakistan last year, including Kandahar and Nangarhar’s popular pomegranates and apples.

Pakistan exported over $200 million in food items to Afghanistan. Mangoes and potatoes topped the list.

But despite strong demand, trade has been slowed by high tariffs, inconsistent rules at the border, and other obstacles.

The new agreement aims to remove one of the largest barriers, excessive tariffs.

A path forward

The deal is expected to benefit small businesses, farmers, and traders in both countries.

“This is more than a trade deal, it is a message of regional cooperation and economic resilience,” said Deputy Minister Zahid at the ceremony. “Our farmers and traders now have a better shot at fair market access.”

Deputy Minister Paul added that Pakistan and Afghanistan share not just a border, but deep cultural and economic ties.

“This agreement renews our commitment to a prosperous, interconnected future.”

The coming months will test how well the agreement works in practice. If successful, it could become a model for wider trade deals across South and Central Asia.