Digital FDI Initiative Pakistan 2025

Pakistan has attracted relatively low levels of digital FDI, especially compared to regional peers such as India and Indonesia. FDI in India is nearly 20 times higher.21 Figures 3, 4 and 5 present a five-year snapshot of digital FDI trends in three main areas: IT, telecom and start-ups.222.3 Digital FDI in Pakistan Three kinds of FDI trends in Pakistan: total net FDI, net digital FDI and percentage of total FDI 2015–2024 FIGURE 3 Source: State Bank of Pakistan Between 2018 and 2024, net digital FDI23 in Pakistan has shown some growth, though there have been fluctuations, with net FDI turning negative in 2023 and 2024.24 This reflects a shift, with more outflows compared to inflows. The spike in digital FDI in 2020, driven by investments during the COVID-19 pandemic, was a positive moment, though the momentum has since decreased. In the fiscal year (FY) 2022, IT and telecom combined contributed 6% of Pakistan’s total FDI, a decrease from 25% in FY 2020. The recent slowdown in digital FDI is influenced by challenging local and global macroeconomic conditions, including the fluctuations in the Pakistani rupee (PKR) against the US dollar. With the formation of a new government in February 2024, there is an opportunity to stabilize political conditions, which will help boost investor confidence and further attract digital FDI. -15%-10%-5%0%5%10%15%20%25%30% -50005001,0001,5002,0002,5003,000 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024Million $Digital FDI as part of Pakistan’s total FDI Total net FDI Net digital FDI % of total FDI Digital FDI Initiative: Digital FDI-Enabling Project in Pakistan 12