KARACHI, Pakistan, Oct 7, 2025: A growing number of multinational corporations are exiting or scaling down their operations in Pakistan, citing regulatory hurdles, macroeconomic instability, and broader global restructuring strategies. The latest among them is Procter & Gamble, which has announced the closure of its direct operations in the country and will now rely on third-party distribution to continue supplying its products to the Pakistani market.
Pakistan faces rising wave of multinational exits amid business challenges.
The decision follows a pattern seen across multiple sectors, with global companies including Shell, Microsoft, Pfizer, Uber, Sanofi, and Eli Lilly either winding down business units, selling stakes, or shifting to import-based models. Industry officials report that 12 multinational firms have exited the country in the past three years, with the pace accelerating in recent quarters. In its October 2 filing, Gillette Pakistan Ltd, a subsidiary of Procter & Gamble, said the parent company was conducting a global business restructuring, prompting the board to consider delisting the local unit from the Pakistan Stock Exchange.
The company indicated it would continue operations via contract manufacturing and local distributors. Oil major Shell exited Pakistan in mid-2023, selling its 77.4 percent shareholding in Shell Pakistan Ltd to Saudi-based Wafi Energy. Shell’s divestment was followed by Microsoft’s departure, ending its 25-year presence in the country. Pfizer, meanwhile, closed its manufacturing plant in Karachi and shifted to a distribution-only model. Uber Technologies ceased operations in five major cities in 2022. Analysts say Pakistan’s economic challenges have significantly affected the operating environment.
A combination of high inflation, currency depreciation, import restrictions, and a volatile tax regime has eroded profit margins and disrupted supply chains. Regulatory delays, particularly in sectors like pharmaceuticals, have made price adjustments slow and operational compliance difficult. In the pharmaceutical sector, Sanofi and Eli Lilly announced their exit in 2022, transferring operations to local firms or regional hubs. Companies have faced difficulties securing timely approvals for price revisions and import clearances.
Major corporations streamline or withdraw Pakistan operations
Several firms have also raised concerns over enforcement of intellectual property laws and shifting marketing regulations that limit engagement with healthcare professionals. Financial constraints have compounded the issue. Pakistan’s foreign exchange reserves have remained under pressure, leading to restrictions on dollar outflows, including repatriation of dividends and payments for imports. This has made it increasingly difficult for multinational firms to operate efficiently or meet corporate governance requirements for listed entities.
The Pakistan Business Council, an advocacy group for large businesses, has previously flagged structural inefficiencies, tax unpredictability, and policy inconsistencies as major deterrents to foreign investment. While some firms have retained market presence through imports or licensing arrangements, their operational scale has diminished considerably. Multinationals are also consolidating global operations in regional hubs with more stable regulatory and financial systems. Dubai and Singapore have emerged as preferred locations for overseeing South Asia and the Middle East, allowing companies to centralize functions such as logistics, finance, and compliance.
Foreign direct investment trends show steep fall
Despite the continuing availability of global brands on shelves through indirect channels, the withdrawal of direct operations signals a shift in corporate engagement with Pakistan. The loss of these businesses represents a challenge for Pakistan’s investment climate, particularly as the government seeks to attract foreign direct investment and stabilize the economy under International Monetary Fund-supported reforms. According to data from the Board of Investment and the State Bank of Pakistan, foreign direct investment fell 25 percent year-on-year in the fiscal year ending June 2025.
The sectors most affected include energy, consumer goods, and pharmaceuticals. The exits come amid efforts by the government to streamline regulatory frameworks and improve the ease of doing business. However, implementation delays and macroeconomic headwinds continue to weigh on investor confidence. With several high-profile companies having already exited, the trend underscores the urgency for structural reforms to retain existing investors and attract new entrants. – By Content Syndication Services.