MNC exodus and the changing times

Pakistan’s business environment is undergoing a period of visible transition. The undocumented economy continues to challenge tax-compliant companies that find it increasingly difficult to compete. The recent transition of Procter & Gamble (P&G), one of the world’s largest consumer goods firms, away from direct operations in Pakistan has drawn attention precisely because the country is consumption-driven, where savings remain low and spending relatively high. In the past, profits for consumer firms were strong, but shrinking purchasing power has now become the main concern. International companies bring leadership, technology, and governance. Despite repeated efforts to attract inflows, foreign direct investment (FDI) has remained subdued. According to the State Bank of Pakistan, net FDI stood at $2.46 billion in FY25, compared with inflows of over $30bn annually into Bangladesh and more than $70bn into India in recent years. Pakistan’s investment-to-GDP ratio has slipped to around 13–14 per cent, while India and Bangladesh maintain ratios above 30pc. For investors, both large and small, structural tax and regulatory hurdles remain significant considerations.