Business
Other side of multinationals’ exit story | The Express Tribune
As some long-entrenched firms leave, new players move in, drawn by signs of economic recovery and growth
Also likely to levy income tax on companies suffering gross losses. PHOTO: NASDAQ
ISLAMABAD:
“All happy families are alike; every unhappy family is unhappy in its own way.” Leo Tolstoy
Procter & Gamble’s exit from Pakistan has reignited debate over the country’s business climate. Many view it as part of a broader trend of multinational companies leaving amid mounting economic challenges. Analysts have pointed to high corporate taxes, restrictions on profit repatriation, and a cumbersome regulatory environment as key reasons. But the story is more complex.
Over the past four years, nine multinational companies have exited or divested their operations in Pakistan. Four of these were manufacturers – three pharmaceutical firms (Pfizer, Sanofi-Aventis, and Eli Lilly) and one consumer goods company (P&G). The remaining were service-sector players such as Shell, Total, Telenor, and Uber/Careem. The pharmaceutical sector has seen the most exodus; though this is not new. Three decades ago, 48 multinational drug companies operated in Pakistan. Today, fewer than half remain. Most have gradually divested, transferring operations or product registrations to local firms that now command over two-thirds of the domestic market.
Price controls and rigid regulations have made it harder for global firms to operate profitably, while local players have grown stronger, more agile, and more competitive.
P&G’s decision appears to reflect its global priorities more than Pakistan’s domestic conditions. Its strategy now centres on manufacturing in major markets like the United States, Europe, Greater China, and India, while exiting relatively smaller markets including Nigeria, Argentina, Bangladesh, Kenya, and others in Latin America.
In the services sector, exits also reflect broader global restructuring rather than a loss of investor confidence. Shell’s sale of its Pakistan operations to Saudi-based Wafi Energy aligns with its strategy to exit retail fuel businesses in several countries. Telenor’s decision, taken in 2022, is part of a move to focus on a smaller set of core markets. Uber and Careem have yielded market share to more affordable competitors such as InDrive and Yango. As some long-entrenched firms leave, new players are moving in, drawn by signs of economic recovery and growth. China’s Challenge Group is investing $150 million in Punjab to develop a high-tech textile zone expected to generate 18,000 jobs and an estimated $100 million in apparel exports.
Consumer healthcare multinational company Haleon is expanding its Jamshoro facility, positioning Pakistan as a regional manufacturing hub and targeting a sizeable part of production for export. Belarus plans to set up a tractor manufacturing joint venture in Balochistan.
In the financial sector, the sale of First Women Bank Limited marks the first successful privatisation in two decades. Though a small transaction, the acquisition by a multibillion UAE investment holding company signals growing investor interest as it explores more opportunities in Pakistan. UAE’s Mashreq Bank is also investing $100 million, aiming to expand financial access for the unbanked and establish Pakistan as a back-office hub for its global operations.
The largest new wave of investment is expected from China as both countries resume work on the long-delayed second phase of CPEC. New investments amounting to $8.5 billion, including $1.5 billion in joint ventures, have recently been finalised, targeting key sectors such as agriculture, renewable energy, electric vehicles, healthcare, steel, and other emerging industries.
It is essential that these new investments do not repeat the old import-substitution model pursued by many existing companies. Instead, they should emulate the example of the Chinese-Pakistani joint venture, Service Long March (SLM) Tyres, which has successfully captured most of the domestic market once dominated by smuggled goods and is now exporting tyres worth $100 million annually, mostly to the United States.
The real challenge for policymakers is to identify and replicate such success stories. Pakistan hosts over 200 multinational companies that play a vital role in driving commerce and industry and contribute more than one-third of the FBR’s total tax collection. Yet, despite this significant presence, their export footprint remains negligible, even as they repatriate over $1.5 billion in profits annually.
In contrast, multinationals operating in other developing countries are far more outward-looking, focused on global markets, earning substantial foreign exchange, and contributing to export growth rather than relying primarily on domestic sales.
The recent reforms to Pakistan’s trade and tariff policies offer an opportunity to shift towards export-led growth, and multinationals can and should play a central role in that transition, as they have elsewhere.
The era of special concessions through SROs and high tariff protection is drawing to a close. Companies can no longer afford to depend on importing components at low duties, assembling them, and selling locally at high margins in a highly protected market.
To remain relevant and competitive, they must break this cycle of dependency and embrace an export-oriented strategy, one that rewards efficiency, innovation, and global competitiveness. This is precisely how the East Asian economies transformed their industrial landscapes and achieved lasting prosperity. By following similar policies, Pakistan can do the same.
The writer is a member of the steering committee overseeing the implementation of the National Tariff Policy 2025-30. He has previously served as Pakistan’s ambassador to the WTO and FAO’s representative to the United Nations
Business
New Income Tax Act 2025 to come into effect from April 1, key reliefs announced in Budget 2026
New Delhi: Finance Minister Nirmala Sitharaman on Sunday said that the Income Tax Act 2025 will come into effect from April 1, 2026, and the I-T forms have been redesigned such that ordinary citizens can comply without difficulty for ease of living.
The new measures include exemption on insurance interest awards, nil deduction certificates for small taxpayers, and extension of the ITR filing deadline for non-audit cases to August 31.
Individuals with ITR 1 and ITR 2 will continue to file I-T returns till July 31.
“In July 2024, I announced a comprehensive review of the Income Tax Act 1961. This was completed in record time, and the Income Tax Act 2025 will come into effect from April 1, 2026. The forms have been redesigned such that ordinary citizens can comply without difficulty, for) ease of living,” she said while presenting the Budget 2026-27
In a move that directly eases cash-flow pressure on individuals making overseas payments, the Union Budget announced lower tax collection at source across key categories.
“I propose to reduce the TCS rate on the sale of overseas tour programme packages from the current 5 per cent and 20 per cent to 2 per cent without any stipulation of amount. I propose to reduce the TCS rate for pursuing education and for medical purposes from 5 per cent to 2 per cent,” said Sitharaman.
She clarified withholding on services, adding that “supply of manpower services is proposed to be specifically brought within the ambit of payment contractors for the purpose of TDS to avoid ambiguity”.
“Thus, TDS on these services will be at the rate of either 1 per cent or 2 per cent only,” she mentioned during her Budget speech.
The Budget also proposes a tax holiday for foreign cloud companies using data centres in India till 2047.
Business
Budget 2026 Live Updates: TCS On Overseas Tour Packages Slashed To 2%; TDS On Education LRS Eased
Union Budget 2026 Live Updates: Union Budget 2026 Live Updates: Finance Minister Nirmala Sitharaman is presenting the Union Budget 2026-27 in Parliament, her record ninth budget speech. During her Budget Speech, the FM will detail budgetary allocations and revenue projections for the upcoming financial year 2026-27. Sitharaman is notably dressed in a Kanjeevaram Silk saree, a nod to the traditional weaving sector in poll-bound Tamil Nadu.
The budget comes at a time when there is geopolitical turmoil, economic volatility and trade war. Different sectors are looking to get some support with new measures and relaxations ahead of the budget, especially export-oriented industries, which have borne the brunt of the higher US tariffs being imposed last year by the Trump administration.
On January 29, 2026, Sitharaman tabled the Economic Survey 2025-26, a comprehensive snapshot of the country’s macro-economic situation, in Parliament, setting the stage for the budget and showing the government’s roadmap. The survey projected that India’s economy is expected to grow 6.8%-7.2% in FY27, underscoring resilience even as global economic uncertainty persists.
Budget 2026 Expectations
Expectations across key sectors are taking shape as stakeholders look to the Budget for support that sustains growth, strengthens jobs and eases financial pressures:
Taxpayers & Households: Many taxpayers want practical improvements to the income tax structure that preserve simplicity while supporting long-term financial planning — including broader deductions for home loan interest and diversified retirement savings options.
New Tax Regime vs Old Tax Regime | New Income Tax Rules | Income Tax 2026
Businesses & Industry: With industrial output and investment showing resilience, firms are looking for policies that bolster capital formation, ease compliance, and expand infrastructure spending — especially in manufacturing and technology-driven sectors that promise jobs and exports.
Startups & Innovation: The startup ecosystem expects incentives around employee stock options and capital access, along with regulatory tweaks that encourage risk capital and talent retention without increasing compliance burdens.
Also See: Stock Market Updates Today
The Budget speech will be broadcast live here and on all other news channels. You can also catch all the updates about Budget 2026 on News18.com. News18 will provide detailed live blog updates on the Budget speech, and political, industry, and market reactions.
We are providing a full, detailed coverage of the union budget 2026 here, with a lot of insights, experts’ views and analyses. Stay tuned with us to get latest updates.
Also Read: Budget 2026 Live Streaming
Here are the Live Updates of Union Budget 2026:
New Delhi: The Cabinet on Sunday approved the Union Budget 2026-27 during a meeting in Parliament chaired by Prime Minister Narendra Modi. A meeting of the Union Cabinet was held at Sansad Bhawan at 10 a.m., and after the Cabinet’s approval, Finance Minister Nirmala Sitharaman proceeded to Parliament to present the Budget.
Earlier, FM Sitharaman met President Droupadi Murmu and offered her a copy of the digital budget. The President also offered ‘dahi-cheeni’ (curd and sugar) to Sitharaman when she arrived at the Rashtrapati Bhavan. The Finance Minister was seen carrying her trademark ‘bahi-khata’, a tablet wrapped in a red-coloured cloth bearing a golden-coloured national emblem on it.
Minister of State for Finance Pankaj Chaudhary, Chief Economic Advisor Dr V. Anantha Nageswaran, Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal and other officials were seen accompanying the Finance Minister. Sitharaman was set to present her ninth consecutive Union Budget in the Lok Sabha. In 2021, she switched to using a digital tablet to carry the Budget papers, further promoting a modern and eco-friendly approach.
The ‘bahi-khata’ is a red pouch that holds the digital tablet containing the Budget documents. This year, Sitharaman opted for a deep maroon Kanjeevaram saree from Tamil Nadu. The saree featured a deep maroon base with a contrasting border and subtle gold detailing, paired with a yellow blouse.
The Budget is likely to strike a deft balance of sustaining growth momentum and maintaining fiscal consolidation. It also needs to address near-term challenges emanating from unprecedented geopolitical flux, said economists. According to economists, the budget is likely to focus more on capital expenditure, especially in sectors deemed to be strategically important owing to prevailing geopolitical compulsions.
While the FY26 Budget was more tilted towards stimulating middle-class consumption with tax reliefs, the FY27 Budget’s approach to stimulating consumption will be selective, they added.
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New Income Tax Act 2025 to come into effect from April 1, key reliefs announced in Budget 2026
Budget 2026 Live Updates: TCS On Overseas Tour Packages Slashed To 2%; TDS On Education LRS Eased
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