Trade between Afghanistan and Pakistan has reached a historic low in fiscal year 2026, significantly impacting both economies. The decline is attributed to ongoing political tensions and logistical challenges hindering cross-border movement of goods. Consequently, Afghanistan is increasingly relying on trade routes through Iran to bypass Pakistani territory. This shift represents a substantial alteration in regional trade dynamics, diminishing Pakistan’s role as a key transit country for Afghanistan. Experts suggest that unless bilateral relations improve and trade barriers are removed, this trend will likely continue. The diminished trade volume poses economic risks for Pakistani businesses dependent on the Afghan market, while further strengthening Iran’s economic ties with Afghanistan. The situation highlights the interconnectedness of regional politics and economic cooperation.