Editorial
Global technology giants are turning their focus to India with unprecedented investments in artificial intelligence and digital infrastructure, highlighting a widening gap between India and Pakistan in attracting foreign capital. Microsoft announced plans to invest 17.5 billion dollars to build AI infrastructure, while Amazon aims to invest over 35 billion dollars by 2030 to strengthen its AI capabilities in India. Google will pour 15 billion dollars into data centres and AI development, and OpenAI is opening an office as usage of ChatGPT has quadrupled in the country.
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India’s emergence as a strategic hub for cloud, AI, and deep-tech growth is reflected in its massive FDI inflows of over 80 billion dollars in the fiscal year 2025. By contrast, Pakistan attracted only 2 billion dollars in the same period, despite having a large consumer market, competitive labour costs, and a strategically favourable location. FDI brings more than capital; it delivers technology transfers, management expertise, global market access, and high-value jobs that Pakistan urgently needs to accelerate sustainable growth.
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Even in a period of US-India trade tensions, including tariffs reaching 50 percent over India’s oil imports from Russia, American firms have continued to commit massive investments to India. Pakistan, despite enjoying a strengthened relationship with the US and leveraging geopolitical developments, has so far failed to convert this advantage into meaningful investment inflows. The country’s economic trajectory will depend on how effectively it can attract long-term, productive FDI.
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To reverse the trend, Pakistan must prioritise predictable, transparent policies that assure multinational firms of stability. Continuity in taxation, energy tariffs, industrial incentives, and business regulations is crucial to reduce perceived risks and unlock the potential of foreign investment for sustainable economic growth.
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