Pakistan gets Trump’s public favour but India is getting all the investment

Global technology giant Microsoft announced this week plans to invest $17.5 billion to help build India’s artificial intelligence (AI) infrastructure, with CEO Satya Nadella calling it “our largest investment ever in Asia”.

At the same time, Amazon plans to invest more than $35 billion in India by 2030 to expand operations and strengthen its AI capabilities.

Major US tech firms have poured billions of dollars into India this year, underscoring the country’s emergence as a strategic hub for cloud, AI and deep-tech growth. India is projected to have more than 900 million internet users by year end.

FDI in India stood over massive $80 billion in the fiscal year 2025, while FDI in Pakistan was around just $2 billion in the same period.

Google has also said it will invest $15 billion in India over the next five years, as it announced a giant data centre and artificial intelligence base in the country. OpenAI has said it will open an India office, with its chief Sam Altman noting that ChatGPT usage in the country had grown fourfold over the past year.

All this is happening when US President Donald Trump has repeatedly shown his displeasure over India buying Russian oil, and imposed sweeping tariffs on Indian exports—initially a 25% “reciprocal” tariff, followed by an additional 25% penalty tied to India’s continued imports of Russian oil—bringing the total duty to a staggering 50%, among the highest imposed on any trading partner.

Trump hikes tariff on India to 50% over ‘oil purchases from Russia’

India’s Prime Minister Narendra Modi and the US president have spoken three times since Trump doubled tariffs on imports from India, hitting exports of textiles, chemicals and food items such as shrimp. New Delhi has been looking for a deal to lower the announced tariff from its largest trading partners for exports.

Despite this, American firms have continued to announce investments in India - not so the case for neighbouring Pakistan, whose leadership has often Trump hailed as great.

FDI is not just a source of financing; it brings technology transfers, management expertise, global market access, and higher-value job creation - elements Pakistan urgently needs to accelerate sustainable growth.

Pakistan’s relationship with the US is stronger than it has been in recent years, especially after the May clash with India. Trump claimed he “brokered a ceasefire” that prevented a South Asian catastrophe, and has repeatedly mentioned the Indian planes got shot down by the Pakistan Air Force, bringing humiliation for New Delhi.

For dealing with Trump, Pakistan has played better cards than India, yet Islamabad has so far failed to utilise its surging global profile to fetch some meaningful investment.

Foreign direct investment (FDI) in India stood over massive $80 billion in the fiscal year 2025, while FDI in Pakistan was around just $2 billion in the same period.

Pakistan’s economic trajectory in the coming years will depend significantly on how effectively it positions itself to attract greater FDI. While the country has taken steps to stabilise its macroeconomic environment through fiscal tightening and structural reforms, these efforts need to be complemented by a strong push to draw in long-term, productive foreign capital.

FDI is not just a source of financing; it brings technology transfers, management expertise, global market access, and higher-value job creation - elements Pakistan urgently needs to accelerate sustainable growth.

Despite its strategic location, a large consumer market, and competitive labour costs, Pakistan continues to lag behind comparable regional economies like India in attracting global investors.

To reverse this trend, Pakistan must prioritise creating a predictable and transparent business environment that assures multinational firms of long-term stability. Ensuring continuity in economic policies, particularly those linked to taxation, energy tariffs, and industrial incentives, is essential for reducing perceived risks.

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