Pakistan and Afghanistan on Wednesday signed a Preferential Trade Agreement (PTA) aimed at reducing tariffs and facilitating smoother trade flows between the two countries.
The agreement was formalised at the conclusion of a two-day dialogue held in Islamabad. It marks the first formal trade pact between Pakistan and the Taliban-led government in Kabul since its return to power in August 2021.
Under the terms of the PTA, tariffs will be slashed to 27 per cent on eight key agricultural products. Afghanistan will benefit from reduced duties on grapes, pomegranates, apples, and tomatoes, while Pakistan will see lower tariffs on mangoes, citrus fruits, bananas, and potatoes — items previously taxed at rates exceeding 60 per cent.
The agreement was signed by Afghan Deputy Minister of Industry and Commerce, Mawlawi Ahmadullah Zahid, and Pakistan’s Commerce Secretary, Jawad Paul.
Officials say the agreement is the result of prolonged negotiations, with Afghanistan pushing for seasonal and storage-based considerations. While Afghanistan initially sought tax cuts on ten items, Pakistan agreed to reduce duties on four for now, with scope for expansion following evaluations.
The Afghan Ministry of Industry and Commerce noted that bilateral trade had approached $1 billion in the first half of 2025, with Afghan exports to Pakistan totalling $277 million, and Pakistan’s exports reaching $712 million.
The PTA will remain in effect for one year, with the possibility of extension and inclusion of additional items based on mutual consultations. Both sides also reached a constructive understanding on transit trade, formation of technical teams, and broader trade development initiatives, according to the Afghan Ministry.
