Pakistan’s benchmark index, KSE-100, crashed over 15,000 points shortly after market open on Monday, following which trading was suspended.

When trading resumed around 10.30am, the index was down 12,334.88 points from its previous close of 168,062.16 points, marking a fall of 7.34 per cent.

The sharp plunge comes a reigonal geopolitical tensions spiked over the weekend as United States and Israel on Saturday launched what they described as a “pre-emptive” joint strike against Iranian targets, with President Trump announcing the start of “major combat operations”.

The tensions have caused Brent crude to jump 10 per cent to about $80 a barrel over the counter on Sunday, oil traders said, while analysts predicted that prices could climb as high as $100.

Substantive reform of the commercial judicial system is vital for fostering a business environment capable of attracting sizeable investment. Without closing the investment gap, translating headline economic recovery into improved lived realities for the wider population will remain difficult.

Investors do not necessarily fault the commercial legal framework itself for eroding confidence, but they express deep frustration with the slow and uneven delivery of justice, which can undermine business viability. Concerns centre on weak enforcement, heavy case backlogs, limited specialised training of judges in commercial law, lack of prioritisation, and perceptions of nepotism and corruption.

These structural weaknesses are widely cited as deterrents for major investment decisions, particularly by multinationals and foreign companies evaluating Pakistan as a destination for large-scale projects.

Confirming investor sentiment, Overseas Investors Chamber of Commerce and Industry (OICCI) Secretary General Abdul Aleem noted that members are not broadly satisfied with how commercial disputes are handled in Pakistan. The OICCI has over 200 member companies (many Fortune 500 firms), operating in Pakistan across 14 diverse sectors.

Resolving a typical commercial dispute in Pakistani courts takes over five years, while only a small fraction settle within one to three years

He cited the OICCI Perception and Investment Survey 2025, which found that half the respondents view Pakistan’s contract enforcement framework as inadequate, while only about a quarter rate it positively. “Businesses acknowledge that the legal framework may align with international standards, but enforcement is seen as weak and inconsistent due to judicial delays, procedural complexity, case backlogs, and post-judgement enforcement is challenging,” he said.

Mr Aleem mentioned cost as another concern. “While attorney and court fees are generally perceived as manageable, enforcement-related expenses continue to weigh heavily on investors assessing the effectiveness of commercial dispute resolution in Pakistan.”

Legal expert Abdul Moiz Jaferii, commenting on the efficiency of commercial dispute resolution, highlighted notable provincial variation in the judicial framework. “In Punjab, dedicated commercial courts have been established where relatively competent judges are deputed to expedite matters. These courts tend to discourage unnecessary adjournments and move cases forward more decisively than the regular system.

“Judges receive specialised training, and the overall standard of the subordinate judiciary in Punjab is generally better than other provinces. Even where error occur, appellate forums, including the High Court, provide avenues to address complex commercial issues more effectively,” he stated.

He further noted, however, that legal protection costs in Pakistan are typically lower than in more established jurisdictions, largely because the system is less structured. “Lawyers often focus on securing interim relief — such as stay orders — which can then be used to negotiate outcomes rather than pursue prolonged litigation. With limited reliance on billable-hour models common in developed markets, legal costs are generally less of a deciding factor here,” he explained.

A leading corporate lawyer, speaking privately, expressed frustration over what he described as a lack of judicial focus in commercial matters. He pointed to a tendency, at times even at higher tiers, to decide cases without a full grasp of their commercial complexity.

“In disputes involving foreign investors and local firms, the playing field can feel uneven,” he said. “Local business interests are often perceived to wield greater informal influence, while multinationals operate within stricter compliance regimes. This asymmetry can shape both perceptions and outcomes in litigation.”

Pakistan’s courts are estimated to be burdened with around 2.4 million pending cases, with no standard timeline for resolution. Efforts to identify how many of these involve commercial disputes were inconclusive, as disaggregated data is not readily available. Many legal practitioners, however, believe purely commercial cases account for less than 10 per cent of the total once family property and assets disputes are excluded.

According to last year’s OICCI survey, more than half of the respondents indicated that resolving a typical commercial dispute in Pakistani courts takes over five years, while only a small fraction settle within one to three years. The most significant delays occur during trial, judgement and enforcement stages.

Mr Jaferii argues that most pending cases in Pakistan stem from property disputes, driven by weak land record systems and the absence of fully digitised, title-based registration. Multiple claimants of the same plots often prolong litigation for years, with little deterrence, as perjury is rarely punished. This sustains a cycle of contested claims.

He believes genuine commercial disputes form a small share of pending cases. “Many so-called corporate cases are in fact family asset conflicts, such as siblings contesting control of inherited companies, disguised as company matters.”

“True commercial disputes over contracts or transactions seldom reach courts,” he notes, “Parties capable of structuring complex agreements typically rely on arbitration or mediation mechanisms. Merchant communities often resolve conflicts through informal yet structured dispute-resolution systems, reflecting a broad preference to avoid courts, where resolution is widely perceived as slow and uncertain.”

Experts note that a litigant’s financial strength in Pakistan can significantly shape the outcomes by enabling access to stronger legal representation and more assertive strategies. “If you can afford to engage multiple lawyers, even beyond necessity, you are more likely to keep the wheels of justice moving faster than would otherwise be possible,” one lawyer observed.

A senior corporate lawyer offered a more nuanced view. “If money alone could secure legal protection, large multinationals would operate independently on the strength of their brands,” he said. “The fact that global companies often enter Pakistan through joint ventures reflects a different reality. In markets like ours, capital and brand value are not enough; access to power corridors, networks, and political understanding also matter for navigating the business environment.”

He noted that multinationals frequently partner with influential local business groups precisely for their ability to engage with institutional and policy stakeholders.

Published in Dawn, The Business and Finance Weekly, March 2nd, 2026

The government will soon present a comprehensive auto and tractors policy aimed at strengthening local manufacturing and indigenisation, says Haroon Akhtar Khan, Special Assistant to the Prime Minister (SAPM) on industries and production.

Development economists argue that localisation and indigenisation, where natural advantage exists, is necessary for developing globally competitive commodity-producing sectors aligned with changing international markets. That, they explain, can expand the potential of these sectors to boost exports, cater to domestic demand, reduce external vulnerability, and stimulate foreign direct investment.

“Largely through partnerships with local companies”, to quote the Securities and Exchange Commission of Pakistan, “the country is attracting substantial foreign investment across a wide range of sectors, particularly energy, logistics, information technology and agriculture.” In the past three years, 79 foreign companies have commenced operations in Pakistan, while international companies invested Rs40.7 billion.

Historical records across emerging economies show that foreign investors follow local investors, recalls Shamsul Islam Khan, a commodities and trade expert. “When domestic industry expands capacity, reinvest profits, and express confidence in long-term policy stability, foreign capital views the country as credible,” he writes in an [article](https://When domestic industry expands capacity, reinvest profits, and express confidence in long-term policy stability, foreign capital views the country as credible*) for The Express Tribune.

With ease in curbs, the State Bank’s latest data shows that profit and dividend outflows on foreign investment during January-July FY26 jumped by 26pc to $1.68bn

Sustainable growth comes from steady capital formation: factories built, machinery imported, skills developed, and exports expanded; a serious economic reset is essential.

Chairing a meeting on Feb 18 with the CEO of Millat Tractors, Sikander Mustafa, Mr Khan said the core objective of the new auto policy is to empower industries, strengthen domestic production and promote domestic-led growth. The government will carry out broad-based consultations with all stakeholders.

During the meeting, Mr Mustafa shared that Millat Tractors had achieved 90 per cent localisation in tractor manufacturing and exporting tractors to the international markets.

The government has also notified a new administration of the Export Development Fund, with an overwhelming majority of 16 private sector members to scrutinise the Fund’s spending proceeds, limiting the role of bureaucracy in managing its affairs. The 22-member administration will be headed by Omer Saeed, CEO of Service Long March Tyres Ltd. He will replace Commerce Minister Jam Kamal Khan as the fund’s chairman, while the position of vice-chairman, held by secretary commerce, has been abolished.

The banking sector has also voluntarily decided to cut the markup on the Export Finance Facility to 4.5pc. Business Recorder analysts say exports grow when policy coherence, cost competitiveness and market access align. Financing plays a role, but it comes late in the chain — at the execution stage — once firms already have orders, inputs and predictable operating conditions.

The International Monetary Fund’s latest acknowledgement that the Fund’s programme has “helped to stabilise the economy and rebuild confidence” should be taken with a pinch of salt, says a Dawn editorial. “However, the gains made over the last couple of years are not trivial.” The data suggests the adjustment burden has fallen disproportionately on lower- and middle-income groups, raising questions about the sustainability of reforms without a parallel strategy for growth, employment and social protection.

With ease in curbs, the State Bank’s latest data shows that profit and dividend outflows on foreign investment during January-July FY26 jumped up by 26pc to $1.677bn compared to $1.328bn in the same period of FY25. In January alone, profit outflows amounted to Rs119m. On the other hand, foreign direct investment inflows dropped sharply to $981bn during July-January compared to $1.66bn in the same period last year, a decline of 41pc.

Pakistan’s food import bill surged to $5.502bn in 7MFY26, a 19.27pc increase from $4.613bn in the same period of last fiscal year. Economist Dr Tasneem Ahmad says Pakistan’s food security requires empowering farmers, which, he stresses, is an economic necessity and strategic imperative. “If Pakistan is serious about food security, rural stability and sustainable growth, protecting farmers from exploitation — whether by markets, mafias or failure — must become a cornerstone of national policy. The time of half measures is long past.”

Simultaneously, trade deficit with nine regional countries jumped by 41.37pc to $9bn in 7MFY26, up from $6.367bn in the corresponding period of last year. The widening gap is attributed to the fall in exports to regional markets, driven largely by reduced shipments to China, followed by Afghanistan and Bangladesh. Exports to Sri Lanka dipped by 28.29pc as well, while Imports from China grew by 24.58pc to over $11bn.

However, the increase in domestic oil and gas production is an encouraging sign. Oil and Gas Development Limited (OGDC) announced on Feb 20 a significant oil and gas discovery at its exploratory well in Kohat district, Khyber Pakhtunkhwa. This is the second consecutive discovery; a day earlier, the OGDC had found gas and condensate at the Dars West-3 well located in the Tando Allahyar district of Sindh.

The government is struggling to step up the implementation of hydropower projects. The National Assembly Standing Committee on Water Resources on Feb 18 recommended 64 water and hydropower projects for FY26 at a cost of Rs976bn amid complaints against the slow release of allocated funds.

Published in Dawn, The Business and Finance Weekly, March 2nd, 2026