KARACHI: In a world where diplomatic overtures often lack economic bite, the recent visit of the United Kingdom’s Trade Envoy to Pakistan, Mohammad Yasin MP, marks a meaningful pivot in the evolving commercial narrative between two historically linked nations. Over the course of his three-day visit to Karachi and Islamabad, Yasin met with high-level government officials, business leaders, and the Special Investment Facilitation Council (SIFC) to outline an ambitious, forward-looking UK-Pakistan trade framework – one that could usher in a new era of bilateral prosperity.
As the two countries prepare for an upcoming UK-Pakistan Trade Dialogue, the big question is: Can Pakistan harness this moment to scale up foreign investment, deepen economic ties, and unlock structural growth, especially under the reformist leadership of Prime Minister Shehbaz Sharif and his economic team?
The United Kingdom remains Pakistan’s largest export destination in Europe and its third-largest worldwide. From textiles to pharmaceuticals, financial services to publishing, British capital has long had a footprint in Pakistan. Over 200 UK companies currently operate in the country, and the top five alone contribute roughly 1% of Pakistan’s GDP.
Yet, despite these robust foundations, the total trade volume between the two nations hovers around £4.7 billion – an amount Trade Envoy Yasin aptly labelled as “insufficient.” This signals not stagnation, but untapped potential. His visit is a clear diplomatic cue: the door to mutual growth is open wider than ever.
Yasin’s message was clear and consistent throughout his engagements in Pakistan: the UK, under its 2035 Growth Strategy, is inviting global investors across eight strategic sectors. Pakistan, with its young demographic (65% under 30), growing fintech space, and potential in agriculture and mining, is well-positioned to seize this opportunity.
“The UK is a haven for companies to invest in,” Yasin declared. “We want to invest in Pakistan – and we invite Pakistani companies to invest in the UK.”
This is not just diplomatic lip service. British policymakers are actively pushing for market diversification, technical collaboration, and modernised frameworks, and Pakistan stands out as a viable partner – if it can deliver consistent governance and structural stability.
It is within this context that Pakistan’s PML-N-led government under Prime Minister Shehbaz Sharif deserves particular recognition. Since assuming office, the premier and his economic team have implemented a results-oriented macroeconomic agenda marked by:
= Disciplined fiscal consolidation – reducing the budget deficit from 5.9% to 3.9% of GDP.
= Revenue generation through structural reform – including agriculture income tax, digital audits, and streamlined tariffs.
= Investment facilitation via the SIFC, which aims to de-bureaucratise FDI approvals and enable one-window access.
= Human capital investment – through increased allocations for health, education, and social protection.
These measures, though still evolving, are laying the groundwork for greater investor confidence. Notably, the IMF, World Bank, and now UK authorities have acknowledged Pakistan’s improving macroeconomic environment – especially when compared to the turbulence of two years ago.
As Yasin noted in his recent interview to leading local publications, “Pakistan is doing much better…but it’s a long road, and these policies need to continue.” That continuity, so often the missing link in Pakistan’s economic story, may now finally be taking shape.
Trade opportunities
The upcoming UK-Pakistan Trade Dialogue will centre on reducing trade barriers, improving access to markets, and resolving investor concerns – particularly around regulatory clarity and intellectual property. Several sectors stand out for targeted investment:
Information Technology and E-commerce: With software development, AI, and fintech expanding rapidly, the UK could become a valuable partner in scaling up Pakistan’s digital economy. Yasin encouraged tech entrepreneurs to engage directly, citing opportunities in both directions.
Agriculture &Agri-Tech: The inclusion of agriculture in Pakistan’s tax net for the first time in the Federal Budget 2025-26 shows the government’s commitment to reform. UK investors can now find structured entry points into precision farming, organic exports, and sustainable agro-solutions.
Renewable Energy: As Pakistan shifts toward solar, wind, and hydropower, UK green investment tools – like carbon levies and green sukuk financing-could help modernise the country’s energy matrix. Already, a UK company has secured a £53 million mineral extraction contract, and McKinsey is advising on mining sector reforms.
Textile and Apparel: As one of the world’s leading textile exporters, Pakistan is now adopting eco-friendly production methods and modern machinery to stay competitive. British expertise in sustainable fashion and textile technology could align profit with planet.
Construction, Infrastructure & CPEC: With urbanisation and China-Pakistan Economic Corridor (CPEC)-related infrastructure surging, Pakistan’s real estate and logistics sectors are booming. British investors looking to expand their footprint beyond Europe may find lucrative public-private partnerships here.
However, all these opportunities rest on a crucial fulcrum: policy consistency. As Yasin underscored, “Security and stability are key for investors. Where they don’t feel confident, they simply do not invest.”
He highlighted that while Pakistan has made commendable progress in the past 18 months – especially through the IMF-supported programme – it must now maintain this trajectory. That means avoiding political volatility, enhancing judicial and contract enforcement, and ensuring protection of intellectual property.
One area of concern raised was pharmaceutical pricing and classification regulations-issues that the SIFC must address to retain credibility among UK-based investors.
The UK is home to one of the largest Pakistani diasporas, and thousands of Pakistani students enrol in UK institutions annually. This educational and cultural bridge offers more than just sentiment – it creates investment ambassadors, family office networks, and intergenerational business ties.
Yasin, himself born in Pakistan, reflected this connection poignantly: “Pakistanis in the UK want to invest here-to give back to the country.” Their hesitation stems not from lack of patriotism, but from a historic distrust in governance. Changing this perception must be part of the broader economic diplomacy toolkit.
From visit to vision – A strategic road ahead: As preparations begin for the ministerial trade dialogue in London later this year, both countries stand on the cusp of a bilateral reset. Pakistan must bring to the table not just goodwill, but concrete reforms, regulatory transparency, and bold policy continuity.
Prime Minister Shehbaz Sharif’s government has already signalled that it is willing to do the heavy lifting. Through reforms in taxation, digitalisation, and investment facilitation, it has created the scaffolding for deeper UK-Pakistan ties.
Now is the time to build the structure.
Rarely do geopolitical moments align with economic ones. Yet today, the UK’s openness to invest, Pakistan’s hunger for capital, and a shared history present a unique window of opportunity.
If both sides act with consistency, transparency, and urgency, the next decade could witness a dramatic expansion of the UK-Pakistan economic corridor – not just in trade numbers, but in shared prosperity.
Agriculture &Agri-Tech: The inclusion of agriculture in Pakistan’s tax net for the first time in the Federal Budget 2025-26 shows the government’s commitment to reform. UK investors can now find structured entry points into precision farming, organic exports, and sustainable agro-solutions.
Renewable Energy: As Pakistan shifts toward solar, wind, and hydropower, UK green investment tools – like carbon levies and green sukuk financing-could help modernise the country’s energy matrix. Already, a UK company has secured a £53 million mineral extraction contract, and McKinsey is advising on mining sector reforms.
Textile and Apparel: As one of the world’s leading textile exporters, Pakistan is now adopting eco-friendly production methods and modern machinery to stay competitive. British expertise in sustainable fashion and textile technology could align profit with planet.
Construction, Infrastructure & CPEC: With urbanisation and China-Pakistan Economic Corridor (CPEC)-related infrastructure surging, Pakistan’s real estate and logistics sectors are booming. British investors looking to expand their footprint beyond Europe may find lucrative public-private partnerships here.
However, all these opportunities rest on a crucial fulcrum: policy consistency. As Yasin underscored, “Security and stability are key for investors. Where they don’t feel confident, they simply do not invest.”
He highlighted that while Pakistan has made commendable progress in the past 18 months – especially through the IMF-supported programme – it must now maintain this trajectory. That means avoiding political volatility, enhancing judicial and contract enforcement, and ensuring protection of intellectual property.
One area of concern raised was pharmaceutical pricing and classification regulations-issues that the SIFC must address to retain credibility among UK-based investors.
The UK is home to one of the largest Pakistani diasporas, and thousands of Pakistani students enrol in UK institutions annually. This educational and cultural bridge offers more than just sentiment – it creates investment ambassadors, family office networks, and intergenerational business ties.
Yasin, himself born in Pakistan, reflected this connection poignantly: “Pakistanis in the UK want to invest here-to give back to the country.” Their hesitation stems not from lack of patriotism, but from a historic distrust in governance. Changing this perception must be part of the broader economic diplomacy toolkit.
From visit to vision – A strategic road ahead: As preparations begin for the ministerial trade dialogue in London later this year, both countries stand on the cusp of a bilateral reset. Pakistan must bring to the table not just goodwill, but concrete reforms, regulatory transparency, and bold policy continuity.
Prime Minister Shehbaz Sharif’s government has already signalled that it is willing to do the heavy lifting. Through reforms in taxation, digitalisation, and investment facilitation, it has created the scaffolding for deeper UK-Pakistan ties.
Now is the time to build the structure.
Rarely do geopolitical moments align with economic ones. Yet today, the UK’s openness to invest, Pakistan’s hunger for capital, and a shared history present a unique window of opportunity.
If both sides act with consistency, transparency, and urgency, the next decade could witness a dramatic expansion of the UK-Pakistan economic corridor – not just in trade numbers, but in shared prosperity.
