The United States of America and Pakistan have a strong bilateral relationship based on a joint commitment to security and stability in the region.  The United States also continues to be Pakistan’s largest trading partner.  During the fiscal year 2005-2006, Pakistan’s total exports were $16.45 billion out of which 26.9 percent were to the United States, whereas its imports during the same period were $28.58 billion, out of which 5.8 percent were from the United States. 

Pakistan’s economic performance in fiscal 2006 (the year ending June 30, 2006) was strong with GDP growth registering 6.6 percent after 8.6 percent growth the preceding year.  With GDP growth averaging nearly 7 percent for the last four years, a strong export sector, and a stable currency, Pakistan is reaping the fruits of several years of stringent macro-economic adjustment. The government has tackled some of the most difficult economic reform issues, including Pakistan’s massive debt overhang.  Pricing has been broadly deregulated, including in the energy sector and import tariffs rationalized and broadly reduced.  The central bank has been granted unprecedented autonomy and capital market prudential oversight has been strengthened.  The present administration has focused on far-reaching structural reforms to privatize public sector organizations, strengthen public and corporate governance, liberalize external trade and has pledged to maintain an open and welcoming investment climate. 

Currently, there are more than 61 firms registered with the American Business Council (ABC) of Pakistan.  The ABC acts as the American Chamber of Commerce for U.S. businesses present in Pakistan.  Some of the leading U.S. firms doing business in Pakistan include Citibank, Pepsi-Cola, Coca-Cola, Procter & Gamble, NCR, Pfizer, Abbot, Merck, Eli Lilly, Wyeth, NCR, Oracle, Microsoft, Cisco, Intel, Chevron (Caltex), AIG, 3M, IBM, Monsanto and several others.  An additional 15-20 companies maintain a presence in the Pakistan market, while others operate through their franchisees or an exclusive local distributor.  For example McDonald’s, KFC, Dominoes Pizza and Caterpillar are represented through local partners.

ABC members play an important role in Pakistan’s economy.  These companies have collectively invested over $1.0 billion in Pakistan and their cumulative annual revenue is around $2.0 billion.  ABC members contribute a sizable amount to the national exchequer every year in the form of direct and indirect taxes.  During the period 2005-2006, ABC members contributed about Pak Rupees 35 billion ($583 million) in form of taxes, approximately 8 percent of the total tax collected by the Government of Pakistan.  These companies are prominent corporate citizens as well; ABC members made contributions valued at over $69 million following the October 2005 earthquake in northern Pakistan.

With a population of approximately 165 million people and a rapidly growing GDP turnover of more than $130 billion, Pakistan continues to offer significant trade and investment opportunities for U.S. businesses. 

The following areas are expected to grow rapidly during the next few years: telecommunication, information technology, power generation (both thermal and hydroelectric), airport and ancillary facilities, oil and gas, franchising and construction.

The best way for U.S. manufacturers and suppliers to penetrate the Pakistan market is to utilize the benefits of the network services and programs of U.S. Export Assistance Centers (USEAC, visit http://www.export.gov/comm_svc/eac.html.) in association with the U.S. Commercial Service at the U.S. Embassy in Islamabad, Pakistan. Seeking the assistance of USEACs before exploring an opportunity in this market is highly encouraged.  We recommend that U.S. firms use an agent/distributor relationship with a locally registered company.  Many foreign manufacturers and suppliers appoint one or more agents/distributors to cover the entire country; at times foreign principals work through a regional office to cover this market.  Several U.S. firms cover Pakistan through their Dubai, Singapore or London offices.