KARACHI: Despite various government-led initiatives, the inflow of foreign investment has remained disappointing so far this fiscal year.

The State Bank of Pakistan (SBP) data on Monday showed that the foreign direct investment (FDI) fell by 26 per cent during the first four months of 2025-26.

During July-October, Pakistan received a total of $747.7 million in FDI, compared to $1.01bn during the same period of the previous fiscal year, a decrease of $263 million.

Some experts said the departure of several multinational companies from Pakistan and uncertainties regarding a war-like situation with Afghanistan and India could never be an ideal situation to invest in Pakistan.

He said the government must make an effort to resolve the situation, but a hard-hitting statement against India and Afghanistan is appearing in the media almost daily. It can only destroy hope for any foreign investment, he said.

The inflows from China, which were still the largest in July-October 2025-26, fell to almost half of last year’s levels. The FDI from China this year was $226.7m, down from $544.4m in the previous year.

Another significant inflow came from Hong Kong, which invested $120m, down from $165m last year.

The inflows from the UK and the UAE were $61m and $86m, respectively, during July-October. However, inflows from the US remained insignificant at just $8.4m compared with $6.4m in the same period last year. US president Donald Trump assured in his statement that his country would invest in mining and offshore oil drilling in Pakistan.

The sector-wise data showed that the highest investment was in the power, gas, and related sector, reaching $311m. However, the inflow was much lower than $638m in 4MFY25. The finance and insurance sectors attracted $264m, up from $245.7m, while manufacturing received $118m, down from $137m last year.

The inflows in October were $179m, mainly from China, Hong Kong and the UAE.

Published in Dawn, November 18th, 2025