ISLAMABAD – The prolonged closure of border crossings between Pakistan and Afghanistan has triggered severe economic fallout for Pakistan, particularly hammering revenues in Khyber Pakhtunkhwa province. Local reports reveal a staggering 53.02% drop in provincial revenue since trade halted in October 2025, prompting urgent calls for federal intervention.
According to leading daily Dawn, collections from the Infrastructure Development Cess (IDC) in Khyber Pakhtunkhwa have plummeted. In the first seven months of the current fiscal year, IDC revenue dwindled to 3.48 billion Pakistani rupees, down sharply from 7.42 billion rupees in the same period last year. This crisis has left exporters, traders, and local businesses in dire straits.
Khyber Pakhtunkhwa’s Finance Advisor to the Chief Minister, Muzammil Aslam, penned a letter to Commerce Minister Jam Kamal, demanding an emergency meeting of provincial and federal stakeholders. The agenda includes the revenue crunch, stranded shipments, frozen payments, and the total paralysis of cross-border trade.
“The extended border disruptions are inflicting profound damage to our revenue streams, economy, and employment landscape,” Aslam emphasized. Initial IDC shortfalls stemmed from a court stay order, resolved in November, but recovery efforts have failed amid the ongoing trade blockade.
Exporters are trapped with cargoes and payments stuck on both sides of the border, rendering many unable to meet statutory cess obligations. The Torkham and other key crossings have remained shut since clashes between Pakistani security forces and Taliban fighters erupted for eight days in October 2025. Despite multiple negotiation rounds, tensions persist.
On January 4, residents of Landi Kotal in Khyber Pakhtunkhwa staged a massive protest under the All Borders Coordinators Council banner. Traders, transporters, tribal elders, daily wage laborers, political workers, and civil society joined forces, decrying the closure as ‘economic murder’ for thousands of tribal families wholly dependent on border trade.
Speakers highlighted Torkham as a vital gateway to Central Asia, sustaining livelihoods for countless households. As diplomatic efforts stall, the economic bleed continues, underscoring the urgent need for resolution to revive this critical trade lifeline.