Trade and travel through the Khunjerab Pass reopen on Monday after Gilgit-Baltistan traders ended a 68-day protest blockade on the Karakoram Highway. The sit-in, sparked by tax disputes, halted operations since late July. Federal officials announced the resolution at 4:35 PM, easing pressure on bilateral ties.
The Khunjerab Pass reopening restores a vital artery for South Asia’s overland trade. This corridor underpins the China-Pakistan Economic Corridor (CPEC), facilitating goods worth over PKR 100 billion annually. Delays risked broader regional supply chain disruptions, from textiles to minerals, underscoring the pass’s role in connecting Central Asia to the Arabian Sea. For Pakistan, the impasse highlighted fiscal tensions in Gilgit-Baltistan, a disputed territory central to geopolitical balances with India and China.
Khunjerab Pass Travel Resumes After 68-Day Protest in Gilgit
Traders in Gilgit-Baltistan launched the protest on 23 July 2025 at Sost Dry Port, blocking the Khunjerab Pass route. They demanded exemptions from sales tax, income tax, and federal excise duty on local imports. The action paralysed the Karakoram Highway, stranding hundreds of Chinese nationals, tourists, and students. Customs clearance suspended, leaving consignments worth millions stuck.
The blockade affected 20 days of initial disruption before escalating. Protesters argued Gilgit-Baltistan qualifies as a non-tariff area, exempt from federal levies extended via the Customs Act. Last year, authorities collected PKR 16 billion in taxes at Sost alone. The sit-in entered its second month by late August, prompting warnings of strained Pakistan-China relations.
Prime Minister Shehbaz Sharif formed a committee on 17 August, led by Energy Minister Sardar Awais Leghari. The panel included Federal Bureau of Revenue (FBR) Chairman Rashid Mahmood Langrial, Interior Minister Rana Sanaullah, and Gilgit-Baltistan Chief Minister Haji Gulbar Khan. Negotiations intensified over two weeks, culminating in a four-point deal.
Protesters’ Core Demands Met
The agreement grants a PKR 4 billion annual cap on tax exemptions for goods imported for local consumption. Only firms registered with the Gilgit-Baltistan government qualify. Sales tax, income tax, and federal excise duty will no longer apply at the border, though customs and regulatory duties persist. A special Statutory Regulatory Order (SRO) will formalise this within one month.
Stuck containers at Sost Dry Port, pending for two years, receive clearance within two days. Authorities also waive demurrage and port charges where tribunals order relief. Exporters gain facilities, and funds allocate for border infrastructure.
Ashfaq Ahmed, chairman of the GB Supreme Council, called the pact a “success of unity” among political, social, and business leaders. “We stood firm for our rights,” he said. Kamran Ghazi, a trader representative, outlined the agenda: exemptions, amnesty for consignments, export support, and development funds.
Federal Government’s Concessions Seal Khunjerab Pass Reopening
The federal team addressed systemic issues. FBR Chairman Langrial explained the prior lack of mechanisms to limit exemptions to locals. “Under the new setup, sales tax, income tax, and federal excise duty will no more be collected at the border,” he stated. Custom duties remain to protect revenue streams.
Energy Minister Leghari announced the exemptions earlier this week, praising dialogue. “This resolves the crisis impacting trade worth over PKR 100 billion,” said Faizullah Faraq, spokesperson for Chief Minister Haji Gulbar Khan. The deal caps exemptions at PKR 4 billion yearly, subject to biennial review.
Traders like Javed Hussain expressed reservations but followed the council’s call to end the sit-in. Rehan Shah stressed implementation: “We will reconvene if the SRO delays.” The Gilgit-Baltistan government commits to enforcing clauses.
Economic Impact of the Blockade
The 68-day halt cost Pakistan dearly. Sost Dry Port handles 80 per cent of Pakistan-China overland trade. Minerals, timber, and fruits flow from China; textiles and leather return. The impasse idled 500 trucks and stranded 300 passengers daily at peak.
In 2024, the pass saw 1.2 million tonnes of cargo. This year, projections fell 40 per cent due to the protest. Reopening boosts CPEC Phase II, including rail links and energy projects. For South Asia, it stabilises routes bypassing Indian waters, vital amid Red Sea tensions.
Local economies in Gilgit-Baltistan suffered most. Traders lost PKR 500 million in daily revenue. Unemployment rose as port workers idled. The agreement injects relief, but critics question the cap’s sustainability.
Background: A History of Border Tensions at Khunjerab Pass
The Khunjerab Pass, at 4,693 metres, links Pakistan’s Gilgit-Baltistan to China’s Xinjiang. Opened for trade in 1986 under the Karakoram Highway, it closes winters due to snow from December to April. Year-round access began in 2023 post-COVID, but disputes persist.
Past closures stemmed from security and weather. The 2025 protest marked the longest civilian blockade, echoing 2019 tax rows. Geopolitically, the pass fuels CPEC investments exceeding USD 62 billion. India contests Gilgit-Baltistan’s status, complicating matters.
China supported resolution efforts, viewing the route as key to Belt and Road. Bilateral trade hit USD 27 billion in 2024, with Khunjerab contributing 15 per cent.
What’s Next for Khunjerab Pass Travel Resumes After 68-Day Protest in Gilgit
Implementation hinges on the SRO issuance by late October. Traders form a monitoring committee with federal oversight. Infrastructure upgrades, including highway widening, allocate PKR 2 billion.
Authorities plan digital customs to prevent future jams. China pledges faster clearances on its side. If met, the Khunjerab Pass reopening could double cargo by 2026.
The Khunjerab Pass reopening eases immediate woes but tests federal commitment to regional equity. As trucks roll again, it signals renewed vigour in Pakistan-China partnership, with eyes on sustained growth.
Published in SouthAsianDesk, September 29th, 2025
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