Pakistan Struggles with FDI in Telecom and IT Sector

Foreign Direct Investment (FDI) nosedived in Information Technology sector with a $21 million decline in the first seven months (July-January) of 2015-16 on a year-on-year basis.

However the overall communications sector comprising (telecommunication, information technology and postal & courier services) registered $53.5 million net FDI with $132.5 million inflow and $79 million outflow.

According to statistics released by the State Bank of Pakistan (SBP), $8.3 million inflow and $29.3 million outflow was registered in information technology sector during July-January (2015-16).

Net FDI in software development remained at $2.9 million and in hardware development it measured at $1.1 million.

On other hands, FDI inflows for IT services remained at $4.3 million and outflow at $29.3 million thus registering negative $25.1 million investment.

According to the SBP data, FDI remained at $74.8 million in telecommunications after $124.2 million inflow and $49.4 million outflow during the period under review.

The postal & courier services registered negative net FDI after outflow of $0.2 million.

According to data, the country’s total FDI increased by 4.6 percent in the first seven months of 2015-16 on a year-on-year basis after receiving $647.9 million FDI in the July-January period, which is $28.4 million higher than the FDI received in the same seven-month period of the preceding fiscal year.

FDI from China amounted to $409 million in July-January, which increased almost 120% from a year ago. The share of Chinese investment in the net FDI during July 2015-January 2016 stands at 63.1%, more than double from 30% a year ago.