SIFC informs NA: FY26 foreign profit repatriation 41pc higher than FDI

ISLAMABAD: The National Assembly was informed on Friday that Pakistan paid USD 2.305 billion in profits and dividends to foreign investors during FY2025-26, exceeding net foreign direct investment (FDI) inflows of USD 1.64 billion by about USD 665 million.

In a written reply to a question by Dr Mahreen Razzaq Bhutto, the minister in charge of the Special Investment Facilitation Council (SIFC) Division said profit and dividend repatriation on direct investment amounted to USD 2.202 billion, while another USD 103.7 million was remitted on portfolio investments.

The combined outflows were nearly 41 percent higher than net FDI inflows, underscoring the scale of investment-income payments abroad during the fiscal year.

Manufacturing accounted for the largest share of profit and dividend repatriation at USD 564.3 million, followed by financial and insurance activities at USD 537.4 million and electricity, gas, steam and air-conditioning supply at USD 496.5 million.

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Wholesale and retail trade accounted for USD 211.6 million, information and communication USD 166.9 million, transportation and storage USD 162.1 million, and mining and quarrying USD 124.6 million. The seven sectors together accounted for more than USD 2.26 billion in remittances.

The sector-wise figures cover profit and dividend payments on both direct and portfolio investments and do not represent a breakdown of direct-investment outflows alone.

The government cautioned against directly comparing annual net FDI with profit repatriation, saying the two figures reflected different aspects of foreign investment.

Net FDI represents inward direct investment after relevant direct-investment outflows, while profits remitted in a particular year may arise from investments made over several years.

It also said improved foreign-exchange liquidity had enabled the clearance of previously delayed payments.

To support its position that Pakistan continued to attract foreign investment, the government cited gross FDI inflows of USD 4.268 billion in FY2024-25 and USD 3.603 billion during July-April FY2025-26. These figures cover different reporting periods and measure gross rather than net inflows.

The government said the Pakistan Investment Policy 2023, the SIFC’s investment-facilitation role, investor support through the Board of Investment and the development of Special Economic Zones were among the measures aimed at attracting diversified, export-oriented investment and encouraging reinvestment.

However, the reply did not establish whether the SIFC had conducted a separate assessment of the impact of profit repatriation during FY2025-26 on foreign-exchange reserves and the current account.

It said confirmation and any quantified assessment should be obtained from the State Bank of Pakistan (SBP) and the Finance Division.

Copyright Business Recorder, 2026