Pakistan's FDI Inflows Are Declining, While India Has the Highest FDI Inflows

The year-on-year Foreign Direct Investment data shows a stark contrast between India's highest-ever FDI inflows of USD 83.57 billion for the current fiscal year and Pakistan's flat foreign investment inflows in 2022.

Pakistan's FDI situation is a shambles. Although Pakistan experienced month-on-month growth of more than 660 percent in April 2022, year-on-year growth reveals the country's dire situation.

According to news agency ANI, a comparison of year-on-year figures shows that foreign direct investment in April 2022 increased marginally by only 0.9% versus April 2021, and overall, FDI in the first ten months of Fiscal Year 2022 decreased by 1.6% year on year, according to Business Recorder.

Apart from flat growth over the previous year with a small base in April 2022, inflows were down by 21.6%, and outflows were down by 89.6% year on year. This implies that total inflows in April 2022 will be lower, which is not a good sign for FDI in Pakistan.

The same pattern can be seen in overall FDI in FY22 so far. Foreign investment inflows were 16.2 percent lower in the first ten months of the Fiscal Year 2022, while outflows were 35.81 percent lower.

The overall picture of foreign investment in the country has not changed significantly in a long time, particularly since inflows from China began to decline after key CPEC projects were completed.

According to the media portal, other factors limiting FDI in Pakistan include a lack of diversification and a failure to increase export-oriented FDI.

According to the media portal, there has also been a decrease in annual FDI flows. Still, FDI stocks are also decreasing where ease of doing business and taxation policy is also hindered.

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