Pakistan and Afghanistan sign PTA to reduce tariffs

ISLAMABAD: Pakistan and Afghanistan inked a Preferential Trade Agreement (PTA) on Wednesday to increase trade ties and slash tariffs on certain items, officials said.

Under the agreement, signed at the conclusion of two-day talks in Islamabad, tariffs on four items from Afghanistan to Pakistan: grapes, pomegranates, apples, and tomatoes, and on four items from Pakistan: mangoes, citrus fruits, bananas, and potatoes will be reduced to 27 per cent, according to an Afghan embassy’s statement.

Tariffs on these items were previously higher than 60 per cent.

The agreement was signed between the Afghan Deputy Minister of Industry and Commerce, Mawlawi Ahmadullah Zahid, and the Secretary Minister of Commerce of Pakistan Jawad Paul.

Pakistan and the ruling Taliban have been involved in discussion on PTA since long and Pakistani officials say almost everything has been finalised.

It is the first agreement between Pakistan and the Taliban government since their control of Afghanistan in August 2021. Officials familiar with PTA talks earlier told Hum News English that Afghanistan’s position was that taxes should be imposed on goods after a certain amount of exports.

Pakistan initially did not agree to this proposal but later agreed in principle and the final decision would be taken in the talks in Islamabad. Afghanistan insisted that since their fruit season is short and their cold storage capacity is also lower than Pakistan.

Pakistan exports potatoes and bananas almost throughout the year and also has a large cold storage capacity. Afghanistan had also proposed reduction/slashing of taxes on ten items but Pakistan said that the duty should be reduced to four initially.

The agreement was signed amid reports that the volume of bilateral trade between Afghanistan and Pakistan has reached nearly $1 billion during the first six months of 2025.

According to the Afghan Ministry of Industry and Commerce, Afghanistan exported goods worth $277 million to Pakistan, while Pakistan imported goods worth $712 million.

The agreement will be effective for one year and may be extended and other items may be added to it, based on necessary evaluations, in consultation with both countries, the Afghan Commerce Ministry said.

“In addition, a constructive understanding was reached in the areas of transit facilities, the establishment of technical teams, and trade development,” the Ministry said in a statement.

Also read: Afghan delegation arrives in Islamabad to finalize PTA: officials