It is not possible to deny the importance of bilateral trade with neighboring countries, however, the smuggling that takes place under its cover cannot be ignored in any way, due to which the Pakistani economy has suffered a loss of trillions of rupees.

Corruption and smuggling are rightly called an illegal parallel economy. Our bilateral trade relations with Afghanistan, Iran and China have been going on for 77 years. Through which the government of Pakistan earns billions of dollars and provides daily necessities to the citizens without interruption. Many federal and provincial departments in the country provide external and internal services to the government including industry and trade, revenue, food and security, but some corrupt officials involved in them facilitate smuggling, hoarding and tax evasion.

Four months ago, a report came to the fore, in which after the smuggling of Iranian oil, the scandal of smuggling of high quality clothes worth 2.05 billion rupees under the guise of Pak-Afghan transit trade was revealed. According to the latest information, there have been encouraging results of tightening the perimeter around smuggling under the guise of transit trade, which has reduced it by 84% in the two months of July and August alone. 

At the top, in order to succeed, it is necessary to reach the final limit against the traffickers and their facilitators. It may be recalled here that few months back, an international report, where it has been pointed out that illegal trade is causing a loss of 700 billion rupees to the Pakistani exchequer annually, it was also then clarified  that as a result of this situation, the ability of law-abiding sectors to earn profits was ending. A report compiled by Jeff Hardy, hosted by a Pakistani think-tank called the Policy Research Institute of Market Economy (PRIME), can surely help Pakistan to take advantage of the golden opportunity of foreign investment worth billions of dollars.

In the review of Pakistan's economic problems, the rate of inflation has been stated at a reasonable level of 25%, which is different from our estimates. But it is not possible to ignore the fact that the abnormal inflation has had a devastating effect on the purchasing power of consumers.The ability to buy products has been affected, partly due to illegal trade. When commodity prices rise faster than incomes, illegal and black markets emerge. For those who cannot afford expensive goods, a market for cheap alternatives to substandard, defective, and harmful goods emerges. According to available data, there are black and gray markets worth 68 billion dollars,which are causing high taxes, tariffs, and duties. It should not be overlooked that proceeds from illegal trade are used for corruption, money laundering and tax evasion, while bribery and extortion are elements that harm the entire economy. Meanwhile, other experts also point to the Afghan transit trade. At times when the country is passing through worst economic crisis, the Afghan Transit Trade is causing further losses to the exchequer.  In a report, the Afghan transit trade has been identified as a major cause of unprecedented damage to our economy.

According to the report, Afghan transit trade is the main reason for the existing black market in the country, as reports say that Afghan officials and traders used to involved in false declarations to Pakistan Customs while importing goods. It is good to see that previous Caretaker Govt has took serious notice of the smuggling of goods under the guise of Afghan transit trade. It has reached an alarming level and Afghanistan's imports under transit trade have risen by a whopping 68%, a media report says. Available figures indicate that Afghan imports, which were reported to be around four billion dollars last year, have increased increased to 6.71 billion dollars in current year, which is causing a huge losses to the national exchequer, particulary the small and medium scale industry has been badly impacted by this illegal trade.

It is high time to regulate it in accordance with international laws. On the one hand, the smuggling of Iranian oil through Balochistan is having a negative impact on the country's economy, on the other hand, there is the problem of Afghan transit trade. According to a report submitted to the government, this is the main reason for the establishment of black market in Pakistan and a major cause of damage to the economy. Afghan authorities and businessmen misdeclare the import of goods to Pakistani customs, resulting in significant discrepancies between the reported and actual value of the goods, and later the same transit trade goods return illegally to Pakistan. Three fourths of the goods are exempted from customs duty. Pakistan is suffering a loss of three billion dollars annually from the illegal trade of Afghanistan. According to another data, Afghan imports increased by 67% under transit trade. Afghan imports, which were 4 billion dollars last year, increased to 6.71 billion dollars in 2022-23.  The goods imported to Afghanistan include artificial fiber, electrical equipment, electronic equipment, tire tube, tea. These imports have recorded an increase of 35%, 72%, 80% and 59% respectively. Imports decreased significantly.

Small and medium scale industries were badly affected, a report came out a few days ago which revealed the smuggling of billions of rupees. Suggestions for solutions were also sought. According to economic experts, domestic exports are affected by illegal trade. The government should adopt a zero tolerance policy against trafficking. It is the need of the hour to align Afghan transit trade with international norms. Meanwhile, it is good to note that an automated digital system is being introduced in Pakistan to bring faster clearance of cargo ships, reduce trading costs and save movement time. Under this system, all seaports and the terminals established in them will be connected to each other under an automatic digital system, especially at the ports of Karachi, Bin Qasim and Gwadar, the clearance of cargo ships will be accelerated, which will provide extraordinary convenience to overseas traders.The new system is part of a single window that will provide logistics- related information to relevant institutions and departments. For international trade activities, delivery of import and export goods, Pakistan is working from 8 major ports. Among them, Karachi, Mohammad Bin Qasim and especially in the future perspective, Gwadar through the CPEC project of Pakistan-China Corridor is central.

At present, Karachi Port accounts for 60% of the national commercial activities, which indicates an extraordinary pressure on it.