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KARACHI: Despite tense relations, Pakistan’s exports to Afghanistan reached a two-year high during the first 10 months of the current fiscal year.
Even the two nations have never shared cordial relations with each other, the land-locked western neighbour has remained dependent on Pakistan for its day-to-day needs. However, India’s growing penetration in the Afghan market has reduced Pakistan’s share.
The latest report from the State Bank of Pakistan shows the country’s exports to Afghanistan reached $1.282 billion during July-April 2917-18. This was higher than the figure of $956 million in the same period last year.
During the last five years, the outgoing government never made any serious attempt to improve trade ties with the war-torn neighbour. With the penetration of Chinese products in Afghanistan, Pakistan’s share has been further reduced.
In 2014-15, exports to Afghanistan were $1.699bn which fell to $1.230bn in FY16 before further declining to $1.165bn in FY17, reflecting the downward trajectory.
However, FY18 recorded better results than the past two years and the performance in the remaining two months could help surpass the previous three-year record.
Afghanistan imports mostly food products such as wheat flour, rice, meet, etc from Pakistan. However, up to 50 per cent of flour mills have now been closed due to low exports.
Pakistan’s textile products have historically had a large share in Kabul but the recent penetration of Indian and Chinese products has replaced the country from its traditional market of finished and unfinished textile products.
It is also believed due to prevalent smuggling to Afghanistan, the size of the exports is likely to be twice as much as the official figures of Pakistan Bureau of Statistics report.
The overall exports of the country have shown a growth of 14pc during the 10 months, with sales to Afghanistan being a contributory factor.
Exporters have been complaining that the export of pharmaceutical products has sharply dropped due to cheaper supply from India and China.
The country is a major exporter of pharmaceutical products to Afghanistan, Sri Lanka, Bangladesh as well as some African countries.
Published in Dawn, June 9th, 2018
