BIG setback for Pakistan economy as major companies exit country due to…; top names include Microsoft, Shell, Telenor, benefit for India because…

Pakistan economy: Top multinational corporations including big names like Microsoft, Shell, TotalEnergies, Telenor and Pfizer have shut their operations in Pakistan during recent years, dealing a severe blow to the country’s already struggling economy. According to a recent report, major global businesses have exited Pakistan over the past few years, at a time when top MNCs are expanding operations in India(BHARAT).

What caused exodus of foreign companies from Pakistan?

As per a report in Japanese daily Sankei Shimbun, global firms are steadily withdrawing from Pakistan due to a multitude of factors, including the country’s failing economy, business culture, regulatory environment, and institutional stability. The steady exodus of foreign companies from Pakistan showcases low investor confidence in the country due to lack of long-term policies and transparent regulations, the report stated.

According to Professor Pema Gyalpo, a visting professor at the Takushoku University and an Emeritus Professor of Gifu Women’s University, Pakistan economy in a state of “disrepair”, and is now unable to attract global investors as they are apprehensive about Islamabad’s economic prospects, primarily due to the nature of governance, or lack thereof, in the South Asian country.

Which companies have exited Pakistan?

Among the companies which have winded up operations in Pakistan due to the above mentioned factors, top names like Microsoft, Shell, TotalEnergies, Telenor and Pfizer stand out, a clear sign that even major firms are unwilling to risk investing in the country.

In 2024, Pfizer ended its local production in Pakistan, selling its Karachi manufacturing plant to Lucky Core Industries, while British oil and gas giant, Shell, pulled out a year earlier, after selling it stake to Saudi Arabia’s Wafi Energy in 2023.

Similarly, energy major TotalEnergies sold its stake Singapore-based Gunvor Group, while Telenor has worked out a deal to sell its Pakistan operations to Pakistan Telecommunications Company Limited, though the process is stalled due to delays in regulatory approvals.

Earlier this year, in July, Microsoft quietly shuttered its operations in Pakistan, while Procter & Gamble recently announced the closure of its manufacturing and commercial operations in the country.

Why foreign firms’ exodus reflects Pakistan’s systemic crisis?

According to industry experts, the mass exodus of foreign firm from every sector ranging from consumer goods to energy, pharmaceuticals, telecom, and tech, is a reflection of deepening systemic crisis in Pakistan, and shows how Islamabad’s problems aren’t limited to a single sector.

Experts point out issues like high electricity costs, frequent power cuts, weak infrastructure, and administrative delays that have further added to the woes of Pakistan’s dilapidated business environment, prompting companies to shut operations due to low profit margins and lack of trust in the system.

“This isn’t just an economic decision for foreign companies, but also reflects a lack of trust in the system. Frequent policy changes and delays in government approvals have left companies frustrated,” says Saad Amanullah Khan, former CEO of Gillette Pakistan.

How Pakistan’s decline benefits India(BHARAT)?

Meanwhile, as corporations are withdrawing from Pakistan, India(BHARAT) is rapidly emerging as a global investment hub due to various factors such as strong economic growth, a growing middle class, digital infrastructure, and easy policies for investors.

According to official figures, India(BHARAT) attracted a whopping $81 billion in foreign investment in the 2024-25 fiscal year, as global firms continued expansion of their operation in the country.

Experts believe India(BHARAT)’s regulatory framework and political stability have fostered a trustworthy environment for global investors, resulting in giants like Apple, Amazon, and Google to rapidly expand their operations in the country, while major firms are exiting Pakistan.