Pakistan’s Pharma Exports Fall as Afghan Trade Halt Deepens Industry Crisis

Pakistan’s pharmaceutical exports have suffered another sharp decline as the suspension of trade with Afghanistan continues to disrupt one of the country’s important overseas markets for locally manufactured medicines.

According to Pakistan Bureau of Statistics (PBS) figures reported by Dawn on October 22, 2026, pharmaceutical exports fell by 30.26% in fiscal year 2025–26. The decline continued in the first quarter of fiscal year 2026–27, when export earnings dropped by 25.53% year-on-year.

Industry representatives have linked the downturn largely to disrupted trade with Afghanistan, alongside higher transportation costs and difficulties reaching other international markets.

The continuing decline raises concerns for pharmaceutical manufacturers, export earnings and Pakistani companies that spent years building commercial relationships with Afghan importers.

Pakistan’s Pharmaceutical Export Figures

Pakistan’s pharmaceutical export earnings dropped substantially in FY2025–26 and remained under pressure during July–September 2026.

Pakistan’s pharmaceutical export earnings declined by approximately $138.44 million in FY2025–26 compared with the previous fiscal year.

The downward trend continued into the first quarter of FY2026–27.

The figures indicate that the decline is affecting both the value and physical volume of medicines exported. Export earnings alone, however, do not show how individual companies have performed or how much of the decline is attributable to each contributing factor.

Why Afghanistan Matters to Pakistan’s Pharma Industry

Afghanistan was a major destination for Pakistani pharmaceutical products before the suspension of cross-border trade.

Data from the Trade Development Authority of Pakistan’s Pakistan Pharma Portal, sourced from PRAL, showed that Pakistan exported approximately $155.68 million worth of medicines to Afghanistan in FY2024–25. This represented around 34.1% of the country’s total pharmaceutical exports for that year.

The market was important not only because of its size but also because Pakistani manufacturers had established distribution networks, relationships with importers and familiarity with local demand.

The interruption of these commercial links has made it difficult for companies to maintain their previous export flows. Rebuilding a lost market can also take time if Afghan buyers shift towards alternative suppliers.

Pharmaceutical Trade Disruption Affects Both Countries

Former Pakistan Pharmaceutical Manufacturers Association (PPMA) chairman Tauqeer ul Haq told Dawn that the suspension of trade with Afghanistan had caused significant losses for pharmaceutical companies and the national exchequer.

He also said Afghan patients were facing difficulties because they had to turn to more expensive medicines.

The effects extend beyond exporters. Pharmaceutical supply chains involve manufacturers, distributors, transporters, customs agents and pharmacies. Disruption at the border can delay deliveries and increase logistical costs.

Medicines also require appropriate storage and handling, with certain products needing controlled temperatures. Extended delays can therefore create additional risks for products that are sensitive to time or storage conditions.

The scale of any medicine shortage or price increase in Afghanistan depends on the availability of alternative suppliers, import arrangements and the specific products affected.

Alternative Suppliers Could Gain Market Share

When an established trading route is interrupted, buyers often seek alternatives to maintain supplies.

Earlier reporting has indicated that Afghan importers have considered sourcing medicines from countries including India, Iran, Turkey and Uzbekistan. If these arrangements become established, Pakistani companies could find it harder to regain their previous market share even if trade resumes.

This is a significant commercial risk because pharmaceutical exports depend on more than price alone. Product registration, regulatory approvals, distribution networks and confidence in supply reliability all influence purchasing decisions.

A prolonged interruption could therefore have consequences beyond the immediate loss of export revenue.

Higher Transport Costs Add to Export Pressure

The Afghan trade disruption is not the only challenge facing Pakistan’s pharmaceutical exporters.

Industry representatives have also pointed to higher oil prices and transportation costs, which can make medicines less competitive in price-sensitive overseas markets. Delays affecting shipments to other destinations have added to the pressure.

These difficulties are particularly important for exporters competing in markets where margins are relatively narrow. Higher freight expenses can reduce profitability or make it harder for manufacturers to win orders.

Companies may also face costs associated with registering products in new markets, obtaining regulatory approvals and arranging inspections of manufacturing facilities.

Diversifying exports can reduce dependence on a single market, but it requires time, investment and support from relevant trade and regulatory institutions.

What the Government Can Do

The pharmaceutical industry has called for government engagement to help restore export opportunities and limit further losses.

Several potential measures could support the sector:

1. Engage with Afghan authorities: Diplomatic and commercial discussions could explore arrangements for legitimate pharmaceutical shipments, subject to applicable security and trade requirements.

2. Support export-market diversification: Government agencies and trade bodies could help manufacturers identify alternative markets and connect with overseas buyers.

3. Facilitate regulatory approvals: Coordinated engagement with foreign regulators could help address delays in product registration and manufacturing-facility inspections.

4. Improve export coordination: A structured mechanism involving the Ministry of Commerce, the Trade Development Authority of Pakistan and industry representatives could help identify practical obstacles facing exporters.

5. Strengthen supply-chain reliability: Predictable transport arrangements and appropriate handling procedures are important for ensuring that medicines reach customers safely and on time.

Any initiative to restore trade would need to take account of the security situation and applicable government policies. Pharmaceutical exports involve public-health considerations, but trade arrangements must also comply with relevant border and regulatory requirements.

Surgical Goods and Medical Instruments Show a Different Trend

The pharmaceutical export decline does not reflect every segment of Pakistan’s medical products industry.

According to the same Dawn report, exports of surgical goods and medical instruments—categories separate from the pharmaceutical figures discussed above—rose by 8.8% to $121 million in the first quarter of FY2026–27.

For the full FY2025–26, exports in that category remained unchanged at approximately $451.53 million.

This difference highlights the importance of examining individual product categories rather than treating all medical-related exports as a single market. Different products have different buyers, regulatory requirements, supply chains and exposure to cross-border disruptions.

What Happens Next?

The immediate outlook for pharmaceutical exports will depend partly on whether trade with Afghanistan resumes and whether Pakistani companies can preserve their relationships with overseas buyers.

The government’s response to the industry’s concerns, changes in international transport costs and progress in accessing alternative markets will also influence export performance.

The next quarterly export figures should help establish whether the decline is continuing or beginning to stabilise.

Conclusion

Pakistan’s pharmaceutical exports are facing a serious setback, with earnings falling in FY2025–26 and declining further during the first quarter of FY2026–27. The suspension of trade with Afghanistan has removed access to a significant market, while transport costs and other export barriers have added to the pressure.

For Pakistan’s pharmaceutical industry, restoring reliable trade channels and expanding access to other markets could help protect export earnings and preserve established commercial relationships.

However, the recovery will depend on practical progress in trade arrangements, regulatory approvals and the competitiveness of Pakistani products. Until those issues improve, the industry is likely to remain under pressure.

Editorial note: Export values and volumes are based on PBS figures cited in Dawn’s October 22, 2026 report. Statements about the causes of the decline and its effects on businesses and patients should be understood in the context of the industry representatives quoted in the reporting.