Sayed Waqar HussainSupervised By Dr. Jehanzeb2026-09-112026-09-112004-04http://repository.uop.edu.pk/123456789/555Afghan Transit Trade (ATT), initiated by Pakistan after 1965, and formally by other ECO countries and ECO Transit Trade Agreement was signed in 1997, transformed gradually into what in the contemporary literature has been assessed as the biggest smuggling racket of the world. The activities of this racket are case of 're-exportation' and a major source of black or underground economy, particularly in NWFP, over the period has assumed such intensive and extensive proportions as are sufficient to absorb the potential of legal trade. It not only prevented the legal currents of trade to take its natural course but stimulated the illegal currents to penetrate in the social and economic space of life in Pakistan, particularly in the province of NWFP. In the past twenty years, this ATT-guided smuggling appeared to have caused a chain-reaction and spread its tentacles to transport, finance, law enforcing agencies, Customs' authorities, guards of border check posts and industrialists not only in NWFP but to all the national economies. The horizontal and vertical proliferation is still on the rise.BUT the worst victim of this smuggling business has been the province of NWFP. Here the proximity of the tribal belt and the prevalent customs regime, greatly facilitated the 'stock and flow' of the goods-in-smuggling. Today the Afghans, tribals and traders from settled area of the province, have made such a nexus that any outside intervention proves ineffective to cut any door in the business and gradually found it more convenient to cooperate rather than to confront the nexus. As a natural consequence, people of the province have given up the idea of honorable living rather found smuggling as legitimate source of earning a livelihood. But still more distressing in the province has been the people's attitude to turn to counterfeiting and adulteration in the popular brands of consumer goodsenThesis