New Delhi, Oct 26 (IANS) While India continues to attract record levels of foreign investment and corporate expansion, Pakistan has witnessed a steady retreat of global firms across sectors.

This contrast reflects not only macroeconomic trends but also the underlying business culture, regulatory frameworks, and institutional capacity that shape investor confidence and long-term strategic decisions, according to an article in Japan Forward, a website of the Sankei Shimbun newspaper.

Pakistan, despite being the fifth-most populous country in the world, has struggled to retain the interest of major international companies. The recent announcement by Procter & Gamble (P&G) to shut down its manufacturing and commercial operations in Pakistan is emblematic of broader challenges, the article by Professor Pema Gyalpo said.

The P&G’s exit follows similar moves by Shell, Pfizer, TotalEnergies, Telenor, and Microsoft. Pfizer sold its Karachi manufacturing plant to Lucky Core Industries in 2024, ending local production. Shell exited in 2023 after years of strategic reconsideration, selling its stake to Saudi Arabia’s Wafi Energy.

TotalEnergies divested its share in Total PARCO Pakistan Limited to Singapore-based Gunvor Group. Telenor, after a failed merger attempt, agreed to sell its Pakistan operations to Pakistan Telecommunication Company Limited, though regulatory approvals have delayed the transaction. Microsoft, after 25 years in Pakistan, quietly shut down its operations in July 2025.

These exits span diverse sectors, consumer goods, energy, pharmaceuticals, telecommunications, and technology, suggesting systemic rather than sector-specific issues. Industry leaders have pointed to high power costs, regulatory uncertainty, and infrastructure bottlenecks as key deterrents.

Saad Amanullah Khan, former CEO of Gillette Pakistan, noted that such departures should serve as a wake-up call for policymakers. The lack of reliable logistics, frequent power outages, and delays in approvals have made it increasingly difficult for MNCs to operate efficiently.

The pharmaceutical sector offers a particularly stark example. Multinational drug companies have faced prolonged delays in price change approvals and regulatory hurdles from the Drug Regulatory Authority of Pakistan (DRAP). Inconsistent enforcement, lack of transparency, and outdated promotional standards have discouraged innovation and investment.

These challenges are compounded by macroeconomic instability, currency depreciation, inflation, and limited access to foreign exchange, which erode profitability and complicate financial planning.

The article highlights that, in contrast, India has emerged as a preferred destination for global investment. In FY24–25 alone, India attracted $81 billion in foreign investments, driven by steady economic growth, a rapidly expanding middle class, and a business-friendly policy environment. The government’s proactive initiatives, such as ‘Make in India’, digital infrastructure expansion, and tax reforms, have created a conducive climate for corporate expansion.

Major global firms are deepening their footprint in India. Airbus is investing across manufacturing, engineering, and training, aligning with national priorities. Microsoft has committed $3 billion to expand its cloud and AI infrastructure, with new data centres planned to support growing demand.

Apple has significantly increased iPhone production, assembling over $22 billion worth of devices in April 2025 alone. Amazon, already one of India’s largest employers, is investing an additional $8.2 billion in cloud infrastructure in Maharashtra. NTT DATA has launched its largest data centre campus in India, while VinFast LLC is building a $2 billion EV manufacturing plant in Tamil Nadu.

The pharmaceutical sector in India is also thriving. Eli Lilly is investing over $1 billion in contract manufacturing and establishing a global capability center in Hyderabad. The company is positioning India as a key hub for innovation and production, including the rollout of its experimental weight loss drug. These moves reflect confidence in India’s regulatory environment, skilled workforce, and infrastructure readiness

–IANS

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