Indo-Afghan ties hit Pakistan's economy

Pakistan has lost almost half of its trade with Afghanistan since India actively began making inroads into the Afghan market about two years ago, a prominent Pakistani industrialist and head of an industry lobby has said.

Pakistan’s trade with Afghanistan has slumped to $1.2 billion from $2.7 billion over the last two years, Zubair Motiwala, chairman of Pakistan-Afghanistan Joint Chamber of Commerce and industry, told Pakistan's Dawn newspaper.

The disclosure is significant particularly as it comes days after the Financial Action Task Force (FATF), a global money-laundering watchdog, decided to put Pakistan on its terrorist financing watchlist, amove that could severely impact foreign capital flow into the country.


Motiwala said Delhi has been providing various items at subsidized rates to penetrate into the Afghan market and the Indo-Afghan air corridor with a 75% rebate has played a vital role in boosting bilateral trade between Delhi and Kabul.

According to the Pakistan Bureau of Statistics, the country’s exports to Afghanistan fell to $1.271 billion in FY17 from $1.437 billion in the previous year. Exports in the first quarter of 2017-18 stood at $319 million.

Motiwala said medial tourism of Peshawar has been badly affected as Afghans now prefer India to Pakistan for affordable treatment. “Hospitals in Hayatabad (suburb of Peshawar) are empty,” he added.

Economists in Pakistan rue that Islamabad is losing its footprint in Afghanistan.