Transit trade widely misused.

ISLAMABAD -- Afghanistan's imports through Pakistan under the transit trade facility rose nearly two-thirds to $7.3 billion in the last fiscal year and the imports comprised a major influx of goods that Islamabad did not buy from international markets for its own consumption due to the external payment crisis.

There seems to be some correlation between the surge in transit trade and the decline in Pakistan's purchases. Out of the increase of $2.8 billion in imports under the Afghan transit trade (ATT) in the previous fiscal year, about $2.3 billion was on account of goods that Pakistan did not import due to the balance of payments crisis, showed official statistics.

Afghanistan imported $7.3 billion worth of goods through Pakistan in fiscal year 2022-23, which ended in June this year. Imports were $2.8 billion higher than the preceding fiscal year.

Pakistani authorities have run an analysis of its own imported goods that showed a double-digit dip during the previous fiscal year and compared with the increase in goods import under transit trade. It was revealed that some of those goods were imported under the ATT Agreement but then smuggled back to Pakistan.

Read Govt tightens transit trade import regime

Two days ago, the government took a raft of measures, including a complete ban on the import of goods under the transit deal, imposition of 10% fee on some other imports and a new condition of bank guarantee equal to duties and taxes in order to ensure that the goods imported by Afghanistan reached their final destination.

The commerce ministry issued the Statutory Regulatory Order (SRO) and amended a 2004 order that governed the country's import and export regime. It banned the import of tyres, black tea, nuts and dry fruits, fabrics, cosmetics, vacuum flasks and home appliances under ATT.

An analysis of 20 major imports of Afghanistan showed that in FY22 Kabul spent $3.3 billion on their imports, which jumped to $5.6 billion, or 70%, in FY23. In the case of Pakistan, the import of those items dropped.

There was a 48% reduction in imports of synthetic fabric by Pakistan but imports of the product through ATT registered a 35% increase during the previous fiscal year, showed the official statistics.

Similarly, Pakistan's imports of electronic equipment decreased 62% but imports of those goods by Afghanistan increased 72%.

Being a landlocked country, Afghanistan has the right to import goods for its consumption through Pakistan's sea, air and...