Trucks driving along the China-Pakistan Friendship Highway before the Karakorum mountain range near Tashkurgan in China’s western Xinjiang province. PHOTO: AFP
Situated at the junctions of South and Central Asia, Pakistan offers an exclusive “corridor of opportunity” for U.S. investment—specifically in the automotive sector and regional trade with Afghanistan. Pakistan’s topography is significant with respect to geographical location; it borders Afghanistan and gives the shortest path to the Arabian Sea. Pakistan’s trade with Afghanistan and the rest of the world depends on its two main land crossings, Torkham and Chaman, thus making Pakistan a logical commercial corridor for foreign investors because its ports in Karachi and Gwadar give landlocked nations—especially Afghanistan—crucial access to conduct international business.
Owing to its strategic location, rising infrastructure, and position as a significant transit hub, Pakistan can serve as a bridge between American manufacturers and untapped Central Asian markets. As Afghanistan’s modernization and economic integration gain momentum, U.S. involvement through Pakistan could open uncluttered trade routes, boost industrial cooperation, and generate a win-win situation for commercial development and regional stability.
By encouraging commerce and infrastructure development in South and Central Asia, the U.S. is moving toward economic diplomacy in an effort to restore stability and rebuild the area. As the entry point to Afghanistan, Pakistan is a major area of interest for us, with involvement in both commercial and transformation projects. Through economic channels, programs such as the Trade and Investment Framework Agreement (TIFA) seek to increase U.S. strategic influence, promote resilience, and combat extremism.
Pakistan’s Trade with CAR’s (FY 2025)
| Central Asian Republic | Exports (Fy2025) | Imports (Fy2025) | Review |
| Kazakhstan | $97.96 million | $129.63 million | Exports down by 47.1%, imports surged from almost zero |
| Uzbekistan | $63.65 million | $79.23 million | Exports declined by 18.2%, imports nearly tripled |
| Kyrgyzstan | $3.99 million | $0.571 million | Exports down 58.3%, imports modest increase |
| Turkmenistan | $1.67 million | $16.57 million | Exports increased 42.7%, imports up 35.5% |
| Tajikistan | $29.79 million | $19.09 million | Exports more than doubled, imports jumped 211% |
Source: Dawn Profit By Pakistan Today
Afghanistan’s Dependence on Pakistan for Trade
With more than 80% of Afghan imports going through Pakistani territory, Afghanistan is largely dependent on Pakistan for both imports and exports. The movement of products across the border is made easier by Pakistan’s road system, which includes national roads. The Afghanistan-Pakistan Transit Trade Agreement (APTTA) gives American businesses a rare chance to participate in transit-based commerce by permitting the lawful transportation of goods across Pakistani territory. U.S. businesses may use Pakistan as a base of operations to participate in the growing need for construction equipment, spare parts, and transport vehicles while Afghanistan undergoes rebuilding.
U.S. Investment Opportunities
U.S.–Afghanistan goods trade collapsed after 2021 (U.S. withdrawal) from $1.23 billion in U.S. goods exports in 2018 to $235.9 million in 2021 and about $33.9 million in total goods trade in 2024. That is quite a small figure. On the other hand, U.S. trade with Central Asia is tiny in the global U.S. trade picture. Central Asia accounted for only ~0.1% of U.S. goods trade in 2021–2022. In 2024 U.S. goods exports with Kazakhstan were $1.1 billion. Uzbekistan, Turkmenistan, Kyrgyzstan, and Tajikistan all range in the low hundreds of millions or less. Pakistan remains a major transit route for Afghan trade. A big surge in Afghan transit cargo in FY22–FY23 rose from US $74,316 to US $102,886, and transit cargo value rose (reported jump from about $4.0bn to $6.7bn year-on-year in FY23). Pakistan’s exports to Afghanistan have been in the hundreds of millions to >$1 billion range in recent years.
The figures listed above explain that annual U.S. goods exports with Afghanistan fell from hundreds of millions (2019–2020) to a few dozen million by 2023 and $11M in 2024, reflecting the political transition and sanctions/uncertainty affecting commercial ties. However, on the contrary, U.S. trade with some Central Asian states (e.g., Kazakhstan) remains at US$1 billion, which is small globally but far larger than U.S.–Afghanistan goods flows.
This helps explain why a logistics assembly hub in Pakistan aimed at Central Asia could be more attractive strategically than relying on Afghanistan’s small current market alone. Longstanding institutional frameworks, the Afghanistan-Pakistan Transit Trade Agreement (APTTA) and Central Asia Regional Economic Cooperation program (CAREC) corridors, make Pakistan the obvious “gateway” for regional overland trade, though use has fluctuated with geopolitics and the opening of alternatives (Chabahar, Iran, rail links). Studies show Pakistan’s share of Afghanistan’s imports peaked in the mid-2010s and later fell as Afghanistan diversified routes; still, Pakistan is a major and often-preferred corridor.
The involvement of the US in Pakistan’s automotive sector seems possible, especially in the areas of logistics, auto sections, and used vehicle sales. Particularly in Afghanistan, where the need for trustworthy, reasonably priced transportation is growing as an outcome of reconstruction, the nation’s experience importing used Japanese and Korean automobiles might act as a re-export centre for automobiles of American origin.
Auto Assembly and Technical Ecosystem
Cities like Karachi, Lahore, and Faisalabad have industrial zones with skilled labour and growing auto parts markets. U.S. companies can establish assembly plants, logistics hubs, or spare parts depots to cater to regional demand. With Special Economic Zones (SEZs) under China Pakistan Economic Corridor (CPEC), there are tax incentives, customs duty reliefs, and infrastructure support that make such investments attractive.
Support for Afghan Reconstruction
American car manufacturers can now contribute to Afghan reconstruction thanks to a clean logistics corridor made possible by Pakistan’s integration into global transit networks and trade agreements. Pakistan is the ideal path for commercial interactions with Afghanistan because of this corridor, which, along with the transportation systems and dry ports, forms an international transportation belt.
Enabling Environment for U.S. Investment
With the Board of Investment offering a one-window option and updated laws for the automotive sector, Pakistan is liberalizing its economy in an attempt to promote foreign direct investment. However, sectoral cooperation and bilateral trade debates are facilitated under the U.S.-Pakistan Trade and Investment Strategy Agreement.
Challenges and Risk Mitigation
Border closures, instability in politics, delays at customs, administrative red tape, taxation problems, and security perceptions are just a few of the hurdles that Pakistan faces as a business destination. Nevertheless, transit operations are getting better thanks to digitization, modifications, and greater collaboration between Pakistan and Afghanistan. Pakistan offers a special opportunity to attract U.S. investment as the country’s strategic importance changes from military confrontation to economic partnership. Trade, capital, technology, and jobs are all facilitated by the country’s facilities, increasing the auto industry and entrance to Afghanistan and Central Asia.
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