Doing business in Pakistan costs 34% more than nearby South Asian countries due to high fuel, electricity, taxes, and interest rates.
Running a business in Pakistan has become much more expensive than in nearby countries. Because of this, many young people now prefer to do jobs instead of starting their own businesses. Studies show that doing business in Pakistan costs about 34 percent more than in other South Asian countries.
Ahmed Jawad, who helped organize the study, said the research used economic and industrial data up to December 2025. He explained that there are many reasons why business costs are high in Pakistan. Fuel is very expensive because of heavy taxes. The government charges 80 rupees extra on each liter of petrol.
Interest rates are also very high. Why Doing Business In Pakistan costs high? due to interest rates are around 12.5 percent, while in nearby countries they are only 6 to 7 percent. Electricity is another big problem. Businesses in Pakistan pay about 34 rupees for one unit of electricity, but in other countries they pay only around 17 rupees.
The fall in the value of Pakistan’s money has made things worse. In 2018, one dollar was equal to about 110 rupees. By December 2025, one dollar became almost 280 rupees. This means imported goods have become very expensive. On top of this, companies also pay very high taxes, sometimes up to 55 percent, which is much higher than other countries.
Bilal Gilani from Gallup Pakistan said government policies have also increased business costs. He explained that trade rules protect local products by stopping cheaper foreign goods from coming in. Because of this, businesses are forced to buy expensive local materials instead of cheaper global ones.
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Doing business in Pakistan is often considered risky due to several ongoing challenges. Problems such as terrorism, money laundering concerns, and political tensions make doing business in Pakistan more complicated, as companies must follow strict regulations. Businesses are required to obtain extra licenses and go through multiple checks, which increases costs, especially for exporters and technology companies.
Because of these high costs, doing business in Pakistan has become more difficult, and the country’s economic growth has slowed. Exports have shown little improvement since 2021, and many medium-sized textile factories have closed. Ahmed Jawad has also warned that future trade agreements that benefit India more than Pakistan could create further problems for local businesses.
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