In August 2025, the border between Pakistan and Afghanistan remains a sign of long-term rivalry and interdependence, symbolizing the ongoing tension. Four years following his quick re-ascent to power in Kabul, commonly referred to as Taliban 2.0, the relationship between the two neighbours remains on a precarious balance between conflict and a veil of cooperation. Islamabad sees the Taliban controlled government as both a strategic asset and a security liability, and Kabul accuses Pakistan of interfering with its affairs as well as worsening the humanitarian disaster.

“Islamabad sees the Taliban government as both a strategic asset and a security liability.”

However, against a backdrop of increasing terrorist threats, an ongoing refugee crisis, and economic needs, there has been a ray of hope as there has been increased trade and third-party mediation, especially by China. Experts emphasize that concessionary mutual bargaining and trust generation are required on an urgent basis, or else the relationship will slide into a low-intensity conflict. Through these, economic incentives and diplomacy in the region have the potential to correct the imbalances and open the area to a safer partnership, likely transforming the region in 2030.

The comeback of the Tehrik-i-Taliban Pakistan (TTP) is the most flammable point in this bilateral interaction. The TTP was founded in 2007 as a cover organization of the anti-Pakistan militants and has taken advantage of the Taliban’s control of Afghanistan since the Taliban took the government last year, with the number of cross-border assaults increasing by more than 70 percent in recent years.

Operations of the Pakistani military, including those in Balochistan in the Sambaza district, in August 2025, during which they reportedly killed 50 TTP militants, demonstrate the frustration of the Islamabad authorities. A Peace Research Institute Frankfurt report early in 2025 points out how the TTP, now the biggest terrorist group in Afghanistan, is supported logistically by some factions in the Taliban government, which has conducted attacks leading to the death of hundreds in Pakistan alone last year. This is supported by United Nations evaluations that show TTP units get up to 43,000 dollars a month in aid, and this is perpetuating a culture of violence that includes bombings and ambushes along the poorly guarded 2,600-kilometer-long border.

At least from the Pakistani perspective, this ideological overlap between the Afghan Taliban and TTP delegitimizes the Afghan claims of neutrality, and retaliatory airstrikes are seen as such violations of sovereignty claims propagated in the Afghan media as being civilian casualties. The subtler views show that there is a blame game between the two, as Kabul claims that it fights groups like ISIS-K within the country and asks Pakistan to do something about the Pashtun grievances that supply TTP.

Meanwhile, Islamabad cites intercepted intelligence indicating a collaboration between the TTP and Taliban. It is also projected that the 20-30 percent increase in the number of incidents may occur in the year 2025 in case nothing is done, and this increase runs the risk of spilling over into other regions of the continent, including the surrounding countries and the USA, which plans to re-enter the counterterrorism talks with Pakistan.

Added to these security problems is the long-term Afghan refugee situation that has provoked strain on Pakistan’s resources and raised mistrust between the two nations. With an estimated 1.4 million registered and 800,000 undocumented Afghanistan in the country, Pakistan began its Illegal Foreigners Repatriation Program late in 2023, repatriating more than 1.2 million, thus far in mid-2025, under accusations of TTP infiltration of arrival groups.

“The comeback of the TTP is the most flammable point in this bilateral interaction.”

According to the United Nations High Commissioner for Refugees, 844,000 individuals were displaced, most of whom were forced to enter the collapsing infrastructure of Afghanistan, where Taliban rule harms the already vulnerable states. Late extensions beyond September 1, 2025, are a demonstration of foreign compulsion. However, in April, Phase 2 targeting Afghan Citizen Card holders continued and led to denunciation by human rights organisations such as Amnesty International over the lack of transparency as well as violation of rights.

The Afghan perspective, expressed in the Taliban rhetoric, calls the deportations inhuman and destabilising, which fosters feelings of anger and facilitates possible recruitment to militant groups. Pakistan justifies the policy as a necessity in counter terrorism efforts. Critics say that it does not consider the humanitarian cost and that those who returned to face torture or threats by the Taliban, despite their claims of amnesty, as an Associated Press report dated July 2025, noted by the BBC, observed.

The International Organization for Migration predicts up to 2.1 million returns this year, incapacitating the Afghan aid-reliant economy and threatening a so-called multi-faceted human rights crisis. Subtler nuances are that hosting refugees costs Pakistan billions of dollars a year, so it is not unilateral. Kabul has limited capacity to absorb them, and it would make sense to share the burden.

Despite this tension, economic interaction in the form of trade and commerce provides a balancing force towards reconciliation since it is through these means that geopolitical tensions can be assuaged by economic dependence. Bilateral trade values have been impressive, increasing in the first half of 2025 to nearly 1 billion dollars. Both countries have exported similar amounts, with Pakistan receiving around 712-774 million dollars’ worth of cement and pharmaceuticals, and Afghanistan receiving coal, fruits, and minerals.

The surge, which is a potential increase of 39 percent as compared to the past fiscal year, can be attributed to border opening and diplomatic overtures culminating in Preferential Trade Agreement enacted on July 2025 which reduced tariffs on eight agricultural products by over 60 percent to 27 percent, tomatoes and other fruits being quoted by 400,000 tons quotas. This is a lifesaver to the Afghan economy, which is under sanctions, offering life-saving services to Pakistan as its leading exports.

Meanwhile, Pakistani economists view it as a de-escalation mechanism following a decline in 2023-2024 due to the shutdown of the borders. Challenges persist, including smuggling and logistical barriers at crossing points like the Ghulam Khan crossing. However, agreements such as the Trans-Afghan Railway agreement with Uzbekistan in July 2025 suggest that there is potential for broader connectivity.

“Despite tension, economic interaction in the form of trade and commerce provides a balancing force towards reconciliation.”

Assuming stabilization of security, trade experts within the Afghanistan Chamber of Commerce and Investment argue that trade will increase twofold by 2030, making the two states dependent on each other, which will be a reason to encourage peace. Nevertheless, commerce and TTP disruptions are dependent on each other, as the former presents the threat of reversals.

The China-Pakistan-Afghanistan trilateral process is at the centre stage of possible breakthroughs in the region. In May 2025, foreign ministers met in Beijing, agreeing to extend the China-Pakistan Economic Corridor to Afghanistan to provide infrastructure and reconstruction and deal with terrorists and refugee repatriation. A second meeting is scheduled in Kabul for summer 2025 to implement highways connecting Peshawar with Kabul and leverage Afghan resources, potentially worth billions.

It is because of its security interest that China, nervous about Uyghur militants and the expansion of the Belt and Road, exercises its influence on the Taliban on the TTP. Through the eyes of Kabul, this presents a desperately needed investment that does not come with Western preconditions, yet India denounces it as interfering with regional stability.

Subtler interpretations by think tanks such as the Middle East Institute warn of threats, such as assaults on Chinese workers, but stress the part the framework plays in combating American and Russian interests. After China, Moscow came in to recognise the Taliban in July of 2025. The extensions of CPEC can connect Afghanistan to the economy, assuming that the control of terrorism can decrease by 2027.

The future of Pakistan-Afghanistan relations in 2025 and beyond will remain clouded by the persistence of a TTP menace and refugee pressures that may lead to broader destabilization unless they are tenaciously overcome. However, trade and trilateral encounters provide hopeful opportunities for blossoming relationships. Cooperative intelligence collection, voluntary repatriation programs, and security-based economic agreements are potential means to develop trust as recommended in recent UN reports.

“The China-Pakistan-Afghanistan trilateral process is at the centre stage of possible breakthroughs in the region.”

On both sides of the conflict, community stakeholders emphasise the importance of solving Pashtun ethnic relationships and mutual resentments to make militancy less attractive. This interdependence could be harnessed, potentially leading to a new equilibrium characterized by regional prosperity amidst global changes. Failure, though, threatens even deeper division, the bearings of which on the security architecture of South Asia are immense.

Disclaimer: The opinions expressed in this article are solely those of the author. They do not represent the views, beliefs, or policies of the Stratheia.