Principal competitors to U.S. businesses in Pakistan are Chinese, European, Japanese, and South Korean suppliers which, at times, offer financing for major projects and government tenders that are difficult to compete with. State-owned Chinese firms are increasingly expanding into market segments traditionally dominated by Western firms. To boost development, Pakistan and China are implementing the China-Pakistan Economic Corridor (CPEC). In 2015, Islamabad and Beijing formally agreed to Chinese financing through CPEC worth now more than approximately $55 billion, targeting energy, ports & shipping and other infrastructure projects. 

Though American products are recognized for their high-quality and are in demand, U.S. goods are often more expensive than other imports, and Pakistani companies have cited that some U.S. firms can be slow to respond to inquiries. Some U.S. firms choose to ship goods to Pakistan from regional offices.

Potential investors in Pakistan face many of the same challenges that exist in other developing economies such as regulatory risk, taxation, and a lack of transparency in public-sector decision-making. Pakistan is a diverse and challenging market, requiring adaptability and persistence. It is often difficult to sell in this market without a reliable local partner, thus choosing the right local partners and careful planning are critical to success.

In May 2022, the Government of Pakistan through SRO 598, implemented a complete ban on the imports of thirty-three categories of luxury/non-luxury items that mainly impacted FMCG, franchise industry in food & beverages, and retail sectors. It lifted the ban on August 19 but subsequently increased duties on many items that had been covered by the ban. Details of this SRO are covered in the later section of CCG under the section “Customs Regulations & Standards.”