The Dark Side of Afghan Transit Trade: Smuggling and Rupee Devaluation
(Jahanzaib khan) Ever wonder why the Pakistani Rupee has been on a downward spiral over the past few years? Turns out the Afghan transit trade has a lot to do with it. The transit trade agreement allows goods to pass through Pakistan into Afghanistan tariff-free. On paper, it sounds like a win-win - boosting trade and the economy. In reality, the poorly regulated agreement has become a smuggler’s paradise, flooding Pakistan with cheap imported goods and costing the government billions in lost tax revenue. What Is Afghan Transit Trade and How Does It Work? Afghan transit trade refers to goods that pass-through Pakistan on their way to Afghanistan. Traders import goods duty-free into Pakistan, then smuggle them into Afghanistan. This loophole has led to massive smuggling and cost Pakistan billions. Once the goods enter Pakistan, traders bribe officials to send the shipments to Afghanistan without paying duties. As much as 80% of the goods never reach Afghanistan and end up in Pakistani m