Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.
Last Published: 9/6/2018

The United States and Pakistan have a strong economic and commercial relationship, with two-way trade of approximately $6.38 billion in 2017. The United States is one of Pakistan’s largest trading partners and a leading source of foreign direct investment. U.S. exports to Pakistan reached $2.80 billion in 2017, a 33 percent increase over $2.1 billion in 2016. The United States was Pakistan’s largest export market in 2017 at $3.5 billion, a 3.8 percent increase over the previous year.

Largely peaceful transitions of government power in 2013 and in July 2018 have contributed to Pakistan’s macroeconomic and microeconomic stability. While Pakistan’s completion of its IMF program in 2016 and the strong performance of the Pakistan Stock Exchange (PSX) initially increased investor confidence, fiscal decisions made by the government over the past year have resulted in an increased Current Account Deficit and dwindling foreign exchange reserves.   The growing balance of payments problem is likely to require Pakistan to return to the IMF for a new program that may force the government to make hard choices regarding spending, revenue collection and other structural reforms to strengthen long-term economic performance.

With a population of approximately 207 million and an overall GDP of close to $300 billion, Pakistan is the seventh-largest market in the Middle East, African, and South Asian regions, as measured in Purchasing Power Parity (PPP). Pakistan has had GDP growth of more than 4 percent each year since 2015, with 5.8 percent growth in 2017, and is expected to remain above 5 percent for 2018 and 2019. Pakistan has a young population and a growing middle class, with English as the main business language, and a highly evolved services sector that contributes 67 percent of GDP. Pakistan has several attributes that make it an attractive market for multinational firms, particularly those in the fast-moving consumer-goods sector, and in infrastructure development. The World Bank’s 2018 Doing Business Report ranked Pakistan 147 out of 190 economies for ease of doing business, compared to India at 100 and Bangladesh at 177.

American firms have a strong presence in Pakistan. Currently, there are more than 66 wholly- or majority-owned U.S. subsidiary firms registered with the American Business Council (ABC) of Pakistan and the Lahore-based American Business Forum (ABF). The U.S.-Pakistan Business Council, an affiliate of the U.S. Chamber of Commerce based in Washington, is another forum for U.S. companies with business and investment interests in Pakistan. There are also hundreds of local firms representing U.S. companies in the market. Some leading U.S. companies doing business in Pakistan include Pepsi-Cola, Coca-Cola, General Electric International, Procter and Gamble, NCR, Teradata, Pfizer, Abbott Laboratories, DuPont, Oracle, Microsoft, Dell, 3M, IBM, Monsanto, McDonald’s, KFC, Pizza Hut, Domino’s Pizza, and Caterpillar.

The U.S. corporate members of the ABC and ABF play an influential role in Pakistan’s economy by upholding global standards of corporate governance. According to the ABC, these companies have collectively invested over $1.5 billion in Pakistan and their cumulative annual revenue is about $4 billion. ABC and ABF members pay direct and indirect taxes annually, contributing significantly to the national treasury. Despite security threats and familiar emerging market concerns over intellectual property rights, contract enforcement, and governance issues, the Pakistan market offers many attractive trade and investment opportunities. With regard to investment, the market has few restrictions on the movement of capital for foreign companies, no shareholding restrictions (beyond a few sensitive industry sectors), simple work-permit rules, no technology transfer requirements and a large and sophisticated entrepreneurial class.

Pakistan and the United States signed a Trade and Investment Framework Agreement (TIFA) in 2003, which provides a forum for discussion of bilateral trade issues. The most recent TIFA intercessional meeting was held in June 2017.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.

Pakistan Trade Development and Promotion