Shahid was a Minister for Production in Muhammad Zia-ul-Haq's cabinet until 1988. He was the father of Shahid Khaqan Abbasi and Sadia Abbasi.
He was an air commodore in the Pakistan Air Force. He moved to Jordan after he was removed from Pakistan Air Force by then Prime Minister Zulfikar Ali Bhutto and served as the advisor of Royal Jordanian Air Force. With the support of then King of Jordan, he undertook construction project in Saudi Arabia which turned him into a billionaire.
He was elected to the National Assembly of Pakistan from NA-36 Rawalpindi-I in Pakistani general election, 1985 by defeating Raja Zafar ul Haq. He was inducted into the federal cabinet of Prime Minister Muhammad Khan Junejo due to his close relationship with Muhammad Zia-ul-Haq and was appointed as Minister for production. He was later removed from the cabinet after Prime Minister Junejo and Zia-ul-Haq developed differences.