Karachi, June 8, 2025 — The Overseas Investors Chamber of Commerce and Industry (OICCI) has raised serious concerns over the mounting economic damage inflicted on Pakistan due to illicit and undocumented trade with India.
In its pre-budget recommendations for the fiscal year 2025-26, the OICCI emphasized that unchecked smuggling and trade leakages — particularly under the guise of Afghan Transit Trade — are bleeding Pakistan’s economy and eroding its foreign exchange reserves.
According to the OICCI, the cross-border trade conducted with neighboring countries such as India, Afghanistan, and Iran continues to operate largely outside of official documentation and regulation. This shadow trade economy is depriving Pakistan of critical revenue and weakening its already fragile economic foundation.
“The existing trade arrangements are riddled with loopholes that encourage smuggling and foreign exchange leakages,” the OICCI stated. It urged the government to act swiftly by implementing firm policies that bring transparency and regulation to cross-border trade.
Among the key proposals, the OICCI called for a comprehensive revision of the Afghanistan Transit Trade Agreement (ATTA) to better reflect the current trade realities while preserving the agreement’s core purpose. The goal, the OICCI noted, is to protect Pakistan’s legitimate revenue base without jeopardizing regional cooperation.
The OICCI also urged the government to:
• Harmonize duty and tax rates across the board to eliminate opportunities for tax evasion.
• Introduce quantitative import limits based on Afghanistan’s actual consumption and population metrics to deter excessive or suspicious imports.
• Engage Pakistani business stakeholders, including OICCI members, in policymaking to ensure trade policies are practical and beneficial to the national economy.
Experts warn that unless urgent measures are taken, the continued leakage of goods through unofficial trade routes with India and Afghanistan will keep depriving Pakistan of vital revenue streams.
With the budget 2025-26 just around the corner, stakeholders hope that the government will incorporate these recommendations to safeguard Pakistan’s economic sovereignty and crack down on illicit trade once and for all.