Pakistan's pharmaceutical exports have fallen sharply over the past year, with industry representatives attributing the decline to the closure of the Pakistan-Afghanistan border since October 2025. Exports dropped 30.26 per cent in FY26 and continued to slide a further 25.53 per cent in the first quarter of FY27, according to data cited in Pakistani media reports.

The Numbers Behind the Decline

According to data from the Pakistan Bureau of Statistics (PBS), pharmaceutical exports stood at USD 319.012 million in FY26, down from USD 457.456 million in FY25 — a reduction of USD 138.444 million. Export volumes also contracted sharply, falling 26.14 per cent from 112,517 metric tonnes to 83,104 tonnes, a drop of 29,413 tonnes.

The deterioration extended into the July–September quarter of FY27, when export earnings fell to USD 73.301 million from USD 98.428 million in the same period of FY26 — a further decrease of USD 25.127 million, or 25.53 per cent. The figures exclude surgical goods and medical instruments.

Afghanistan: Pakistan's Biggest Pharma Market

Afghanistan has historically been the single largest destination for Pakistani pharmaceutical exports. According to destination-wise figures cited in Pakistani business publications, exports to Afghanistan reached USD 155.68 million in FY25, accounting for roughly 34.1 per cent of Pakistan's total pharmaceutical export earnings that year. The loss of that market following the border closure has left a significant gap in export revenues.

Former chairperson of the Pakistan Pharmaceutical Manufacturers Association (PPMA), Tauqeer ul Haq, described the suspension of trade as having 'caused major losses for the pharmaceutical industry and the national exchequer.' He also noted the humanitarian dimension, stating that Afghan patients are being pushed toward more expensive medicines as Pakistani supplies are cut off.

Government Promises, Slow Follow-Through

The PPMA has reportedly raised the issue at the federal level. According to reports, Federal Planning Minister Ahsan Iqbal has promised to take up the matter with relevant authorities and explore avenues to resume Pakistani medicine exports to Afghanistan. However, Tauqeer ul Haq reportedly deplored what he described as a 'lack of follow-up' on those commitments.

The Diplomatic Context

The border closure reflects broader tensions between Pakistan and Afghanistan that have intensified since the Taliban regained control of Kabul in 2021. Pakistan has repeatedly accused the Afghan government of harbouring militant groups, including the Tehreek-e-Taliban Pakistan (TTP) and ISIS-K, which carry out cross-border attacks on Pakistani soil. Afghanistan has denied sheltering such elements and has in turn blamed Pakistan for its internal security challenges.

The border has remained closed since October 2025 following an escalation in cross-border violence, triggering economic consequences on both sides — rising commodity prices, restricted medical travel, and disrupted livelihoods. Businesses on both sides have reportedly begun exploring alternative regional trade routes. Afghanistan, for its part, has accelerated a shift toward alternative medicine suppliers, signalling a longer-term realignment of its medical supply chain away from Pakistan.

What This Means Going Forward

The Pak-Afghan pharmaceutical trade dispute illustrates how geopolitical friction can rapidly translate into public health vulnerabilities, particularly in a landlocked, aid-dependent economy like Afghanistan. With the border showing no signs of imminent reopening and Kabul diversifying its supplier base, Pakistan's pharmaceutical sector faces the risk that even a future resumption of trade may not fully restore its earlier market share. Industry bodies are now pressing Islamabad for a structured diplomatic intervention before the commercial relationship becomes irreversible.