Pakistan and Afghanistan Ink Preferential Trade Deal, Slashing Tariffs on Agricultural Imports

In a move poised to enhance cross-border commerce, Pakistan and Afghanistan have formalized a Preferential Trade Agreement (PTA) that introduces major tariff cuts on mutually exported goods. The deal was signed on June 18 in Islamabad by Jawad Paul, Pakistan’s Secretary of Commerce, and Mulla Ahmadullah Zahid, Afghanistan’s Deputy Minister for Commerce and Industry.

The agreement aims to reduce tariff rates from 60% to 27%, significantly lowering costs for traders and improving access to fresh produce across the region. It is expected to come into force on August 1, 2025, pending final approval from Pakistan’s federal cabinet. Valid for an initial period of one year, the agreement may be extended through mutual consent.

The PTA outlines specific tariff relaxations on agricultural goods — an area of high trade potential between the two nations. Pakistan will lower duties on Afghan exports such as grapes, apples, pomegranates, and tomatoes, while Afghanistan will cut tariffs on Pakistani mangoes, potatoes, bananas, and kinnows.

This agreement not only enhances agricultural trade but also signals a commitment to long-term economic collaboration, particularly in the face of regional supply chain challenges and inflationary pressures.

Officials also confirmed the establishment of a technical working group to explore a dedicated Transit Trade Agreement, potentially streamlining logistics and customs procedures for goods moving through both countries.

With trade relations historically hindered by security and political issues, the signing of this PTA signals a renewed effort to prioritize regional economic growth and stability through commerce.