A surprising economic development is rippling through South Asia: India and Afghanistan have resumed trade cooperation worth nearly $100 million, signaling a fresh wave of partnership between the two nations. While this boost is a win for India and a lifeline for Afghanistan’s struggling economy, it represents a clear strategic setback for Pakistan, a country that has historically positioned itself as Afghanistan’s closest trade and transit route.

This new shift may redefine geopolitical dynamics in the region, particularly at a time when alliances are shifting and economic corridors are becoming tools of power.

India-Afghanistan Trade Makes a Strong Comeback

For years, India and Afghanistan traded goods through Pakistan. But tensions, restrictions, and border closures frequently disrupted the flow of products such as Afghan dry fruits, pomegranates, saffron, pharmaceutical goods, and machinery. After 2021, trade went nearly silent due to Afghanistan’s political transition.

Now, a $100 million trade revival, facilitated through alternative routes—including air corridors and Iran’s Chabahar Port—has breathed new life into bilateral commerce.

India has shown a clear commitment to supporting Afghanistan through economic engagement rather than withdrawing from the region. This recent trade boost includes:

Fresh consignments of Afghan fruits and agricultural products

Expanded Indian exports of medicines and essential goods

Increased air cargo connections

Revival of contracts suspended since 2021

For Afghanistan, battling a collapsing economy and high unemployment, this trade resurgence provides necessary revenue and opportunities for small businesses.

Why Pakistan Sees This as a Strategic Loss

Pakistan has long viewed Afghanistan as part of its strategic sphere of influence—geographically, politically, and economically. For decades, it acted as the primary land route for Afghan imports and exports.

This $100 million uptick in India–Afghanistan trade—taking place without Pakistan—signals something Pakistan has tried to avoid: Afghanistan reducing its dependence on Pakistani borders.

Pakistan’s concerns stem from three major shifts:

1. Loss of Transit Control and Revenue

By bypassing Pakistan through Iran and air corridors, both India and Afghanistan reduce Pakistan’s role as a necessary transit route.

This means:

Less transit revenue

Less leverage over Afghan trade

Reduced regional influence

Transit politics has always been a key component of Pakistan’s strategy, and this development weakens that tool.

2. Growing India–Afghanistan Ties

Islamabad has long been uneasy about close cooperation between New Delhi and Kabul. The revival of trade signals something deeper than economics: a political partnership that Pakistan traditionally tried to counterbalance.

With India re-establishing itself as a dependable economic ally to Afghanistan, Pakistan risks losing its position as Kabul’s primary gateway to the region.

3. Pakistan’s Strained Relations With Both Countries

Pakistan’s relations with India remain tense, and its relations with Afghanistan have deteriorated due to security concerns and cross-border issues. These tensions have made long-term cooperation difficult.

As a result, both India and Afghanistan now prefer alternate channels—even if they are more expensive—because they offer reliability and predictability.

How Iran Becomes the Unexpected Winner

The most notable beneficiary of this shift is Iran, particularly through the Chabahar Port, which India has helped develop.

The port offers Afghanistan:

A stable trade route

A way to skirt Pakistani territory

Access to the Arabian Sea without transit disputes

The more India and Afghanistan depend on Chabahar, the more Pakistan’s Gwadar Port and traditional land routes lose regional dominance.

Economic or Political? It’s Both

At first glance, a $100 million trade revival might seem like a simple economic development. But in South Asia, economics is never detached from politics.

For Afghanistan:

It’s a chance to diversify economic partnerships and revive trade networks.

For India:

It strengthens its regional influence while affirming its long-standing role in Afghanistan’s development.

For Pakistan:

It’s a moment of reevaluation, as the trade bypass threatens its strategic positioning.

What This Means for the Region

The revival of India–Afghanistan trade has broader implications:

Power shifts: India gains influence while Pakistan’s regional grip loosens.

Economic diversification: Afghanistan reduces reliance on one country for trade routes.

Increased competition: Trade corridors like Chabahar and land routes through Central Asia may become more active.

Diplomatic ripples: Pakistan may be forced to reconsider its trade policies to remain relevant.

While the $100 million figure is just a beginning, the political message behind it is overwhelming: India and Afghanistan are rebuilding ties—without Pakistan involved.

In a region where trade often tells the story long before diplomacy does, this development marks a new chapter in South Asian geopolitics.