Trade routes tremble as Pakistan moves forward with the repatriation of Afghan refugees.Pakistan already  hosts a significant number of Afghan refugees to help escape the tumultuous situation in Afghanistan despite confronting myriad of problems ranging from stumbling economy to political upheaval, frequent terrorist attacks and looming security threats from TTP resurgence.

Since the Soviet invasion of Afghanistan in 1979, Pakistan has hosted over 5 million Afghan refugees, making it one of the largest refugee-hosting nations in the world. These refugees have integrated into Pakistan’s economy, contributing as laborers, traders, and business owners, particularly in cities like Peshawar, Quetta, and Karachi. However, amid worsening economic conditions and rising security concerns, Pakistan has decided to repatriate undocumented Afghan refugees. This move has sparked humanitarian concerns, but its economic and trade-related consequences remain largely overlooked.

Pakistan, the largest trading partner of Afghanistan, accounts for 60% of its total imports despite strained relations, bilateral trade links have remained largely intact, although there has been notable decrease in volume. In July 2024 the total bilateral trade volume between Pakistan and Afghanistan reached $141.18 million. For over four decades, Pakistan has been a sanctuary for Afghan refugees, offering them shelter, employment, and economic opportunities despite its own political and economic struggles. However, as Pakistan now moves towards repatriating Afghan refugees, concerns about its impact on Pakistan and Afghan trade relations are surfacing. While the government views repatriation as a necessary step to address security threats and economic constraints, the implications on trade could be far-reaching. The expulsion of 1.7 million undocumented refugees may not only strain diplomatic ties but also disrupt bilateral trade, reduce market demand, and push Afghanistan toward alternative economic partners.

Pakistan exports essential commodities, including wheat, rice, medicine, and fuel, while Afghanistan provides Pakistan with coal, fresh fruits, and dry fruits. The Torkham and Chaman border crossings serve as crucial trade routes, sustaining economic ties between the two countries. The refugee repatriation process could further escalate tensions, affecting not only refugee livelihoods but also regional trade stability. Afghan refugees residing in Pakistan are active consumers of Pakistani products, from essential food items to clothing and household goods. Their forced departure will shrink this consumer base, particularly in urban centers with large Afghan communities. This reduction in demand could impact local businesses and small-scale industries, adding to Pakistan’s economic challenges. The expulsion of Afghan refugees has already strained diplomatic relations between the two countries. If Kabul views the repatriation as an aggressive move, it may impose trade restrictions, border closures, or additional tariffs on Pakistani goods. Such actions could significantly hamper trade flow, increase transportation costs, and create logistical hurdles for Pakistani exporters.

A considerable portion of Pakistan and Afghanistan  trade occurs through informal channels, facilitated by Afghan refugees who serve as traders and middlemen. Their expulsion could disrupt these informal trade networks, leading to supply chain difficulties and market shortages in both countries. Moreover, it may encourage smuggling and black-market trade, further complicating economic governance.