FDI in Pakistan’s IT Sector Shows Massive Recovery With Nearly 170% Increase

Foreign Direct Investment (FDI) in Pakistan’s Information and Communication Technology (ICT) sector reached $158.1 million in FY 2025, according to data released by the Ministry of IT and Telecom.

The figure marks a nearly 170% increase from FY 2024, when total ICT FDI stood at $93.4 million, but remains well below the levels recorded in FY 2021 and FY 2022.

The ICT sector FDI stood at $284.4 million in FY 2021 and peaked at $326.6 million in FY 2022 before declining to $107.2 million in FY 2023. The data reflects volatility in foreign investment inflows into the sector over the past five years.

FDI in the telecommunications sector rose to $97.1 million in FY 2025, showing a sharp increase from $46.1 million in FY 2024 and $57.7 million in FY 2023. Despite the rebound, telecom investment remains significantly below earlier levels, particularly in FY 2022, when FDI reached $174.9 million, and in FY 2021, which recorded $204.4 million.

Investment in the information technology (IT) segment amounted to $61.1 million in FY 2025, up from $47.3 million in FY 2024 and $49.6 million in FY 2023. However, the IT sector FDI continues to trail far behind FY 2022, when it stood at $151.7 million, and FY 2021, when it reached $80 million. The figures point to a gradual but uneven recovery in investor confidence.

Within the IT sector, software development attracted $9.7 million in FDI during FY 2025, compared to $8.4 million in FY 2024. This remains lower than $14.8 million in FY 2023 and $45.8 million in FY 2022. In FY 2021, software development FDI stood at $15.9 million, indicating a long-term decline from previous highs.

Hardware development continued to receive minimal foreign investment, with $0.4 million recorded in FY 2023, following $1.3 million in FY 2022 and $0.4 million in FY 2021. No significant improvement has been reflected in recent years.

FDI in IT-enabled services, including IT services and business process outsourcing (BPO), reached $51.4 million in FY 2025. This represents an increase from $38.9 million in FY 2024 and $34.4 million in FY 2023 but remains below FY 2022 levels of $104.6 million and FY 2021 levels of $63.7 million.

According to the Ministry of IT and Telecom, the data shows that while IT-enabled services have demonstrated resilience, sustained policy stability and investor facilitation are essential to restore higher FDI inflows into Pakistan’s ICT sector.