ISLAMABAD: Pakistan and Afghanistan have signed a Preferential Trade Agreement (PTA) to reduce tariffs on selected agricultural products, in a move to strengthen bilateral trade and economic cooperation.
The agreement was signed during a ceremony in Islamabad between Afghan Deputy Minister for Commerce and Industry Ahmadullah Zahid and Pakistan’s Commerce Secretary Jawad Paul, Afghanistan’s Ministry of Industry and Commerce said on X on Wednesday.
د دوه ورځنیو هر اړخیزو بحثونو وروسته، افغانستان او پاکستان د زراعتي توکو پر ترجیحي تعرفو د کمښت هوکړه وکړه
د صنعت او سوداګرۍ وزارت معین، مولوي احمدالله زاهد، د افغانستان له سفیر مولوي سردار احمد شکیب او مل پلاوي سره یو ځای، د پاکستان د سوداګرۍ وزارت له مرستیال جواد پاول4/1 pic.twitter.com/gQViNiAlw5— Ministry of Industry & Commerce AFG (@MoICAfghanistan) July 23, 2025
“Under the provisions of this agreement, the tariff rates on four Afghan export items to Pakistan-grapes, pomegranates, apples, and tomatoes- as well as four Pakistani export items to Afghanistan – mangoes, kinnows), bananas, and potatoes- which previously exceeded 60%, will now be reduced to 27%,” the Afghan embassy said in a post on X.
“This agreement will be effective for a period of one year, commencing on August 1, 2025,” it said.
“It is renewable and also allows for the inclusion of additional items in the future,” according to the embassy.
The Preferential Trade Agreement (PTA) was formally signed between the Ministry of Industry and Commerce of Afghanistan, represented by H.E. Deputy Minister Mullah Ahmadullah Zahid, and the Ministry of Commerce of the Islamic Republic of Pakistan, represented by H.E. Deputy… pic.twitter.com/Qr90FaGnXW
— AFG Embassy Pakistan (@AfghanEmbPak) July 23, 2025
The signing of this agreement builds on earlier discussions, including an Early Harvest Programme (EHP) designed to kick-start trade between the two nations.
The programme will introduce preferential tariff concessions on key agricultural products, with both countries agreeing to lower tariffs on a specified list of goods.
The initiative is designed to boost trade and strengthen economic cooperation across the region.
According to a report published by the Afghan Ministry of Commerce, trade between Pakistan and Afghanistan reached nearly $1 billion in the first half of 2025.
Afghanistan’s exports to Pakistan stood at $277 million, while Pakistan’s exports to Afghanistan reached $712 million.
Afghanistan’s major exports to Pakistan included cotton, coal, soft stone, and dry fruits. In return, Islamabad exported industrial and food items.
Despite this progress, the trade volume remains below its potential, with estimates indicating it could reach $8 to $10 billion annually if existing barriers are addressed.
