Editorial
The Overseas Investors Chamber of Commerce and Industry (OICCI), under its “The first port of call for foreign investors” banner, has released its FDI Pulse 2025 report, shedding light on the troubling realities surrounding Pakistan’s foreign direct investment (FDI) landscape. The report, part of OICCI’s March 2025 Insight publication, highlights a shift in Pakistan’s investment demographics, revealing an alarming decline in investments from traditional Western sources while China’s dominance continues to rise.
The report paints a stark picture of Pakistan’s FDI trajectory, with China now controlling 40% of the total foreign investment in the country, averaging $650 million annually over the last four years. This shift contrasts sharply with the past, when traditional investors from the USA, UK, and Europe led the charge. However, the report identifies Pakistan’s failure to balance its investment strategies, particularly its focus on China under the China-Pakistan Economic Corridor (CPEC), while neglecting the concerns of its Western partners. Key grievances from these traditional investors—such as an uneven playing field, a flawed regulatory framework, and a lack of a conducive business environment—remain unaddressed.
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When compared to regional peers like India and Vietnam, Pakistan’s performance is troubling. While both India and Vietnam have experienced robust economic growth and increasing FDI inflows, Pakistan has seen a dramatic decline. In 2024, India secured $71 billion in FDI, while Vietnam surpassed $25 billion. Pakistan, on the other hand, struggled with an average FDI of just $2 billion annually. The report attributes this stagnation to a combination of security risks, political instability, and a lack of policy consistency, factors that have consistently deterred investors.
Looking ahead to 2025-26, Pakistan’s FDI outlook remains constrained by these issues, while India and Vietnam are poised to capture high-end markets driven by technology and innovation. To revive foreign investment, Pakistan must address its security concerns, resolve governance issues, and attract a more diverse range of investors, including its traditional Western allies. Only then can Pakistan hope to reclaim its position as a key player in the global investment landscape.
