How Indian states outpace Pakistani provinces in investment competition

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Lahore: Indian states actively fight for investment in policy concessions, infrastructure development and business reforms. On the contrary, there is limited sovereignty in economic policy -making in the provinces of Pakistan, in which the attraction of investment has been widely managed at the federal level.

The inter -state competition, which benefits the Indian economy, is driven by the country’s federal structure, and provides the states with significant control over economic policies. Indian states steadily increase governance to ensure the level of playground for investors.

The Indian government, in conjunction with the World Bank, is the states on the basis of ease of business (EODB). States like Gujarat, Karnataka, Maharashtra and Tamil Nadu perform permanently, which makes important investment. The acquisition of land, labor laws, implementation of agreements and reforms in the tax administration have further improved their rankings.

Many states offer specific policies in the sector, including Tamil Nadu’s electronics and EV policy, Gujarat textile policy, and Karnataka’s IT policy. Andhra Pradesh and Telangana investment concessions provide tax intervals, capital subsidies and single window clearance.

Maharashtra (Mumbai) and Gujarat (Gift City) have developed global financial and industrial centers, while states have invested in highways, industrial transits, special economic zones (SEZs) and smart cities to attract investors.

States like Uttar Pradesh and Madhya Pradesh have eased labor laws to promote manufacturing investment, while Tamil Nadu and Karnataka offer incentives for skilled workers in IT and manufacturing. Vibrant Gujarat, Uttar Pradesh investors, and the summit of major investors, including the Bengal Global Business Summit, reflect investment opportunities and facilitate agreements with global investors.

Several Indian states have set up international trade offices. Tamil Nadu and Maharashtra have maintained strong ties with Japan. Gujarat has partnerships with the United Arab Emirates and the UK, while Telangana and Karnataka attract us through direct dialogue.

Although the provinces of Pakistan are engaged in investment competition at some level, it is significantly less structural and aggressive than the Indian states. Many factors, including limited provincial sovereignty in economic policy, are hindering this competition. Unlike their Indian counterparts, the provinces of Pakistan lack free powers over tax, industrial policy, and investment incentives, which are mostly controlled by the Board of Investment (BOI), the Ministry of Commerce, and the Federal Board of Revenue (FBR).

There is no formal rating system in the provinces for ease of doing business. Punjab has made some progress by digging ground records and setting up an industrial zone, but other provinces are left behind.

There are investment policies but contradictory. Punjab is the most active, developing SEZS and industrial properties under the Punjab Board of Investment and Trade (PBIT). Sindh has focused on Karachi but it faces challenges of governance, which hinders the SEZ near Port Qasim and Dhabiji. Khyber Pakhtunkhwa (KP) promotes hydro and tourism projects but struggles with security concerns. Despite Gwadar’s potential, Balochistan lacks infrastructure and stability needed to attract large -scale investment.

Infrastructure and industrial development varies in the provinces. Punjab has a better road network, power supply and industrial parks, while Sindh benefits from the financial center and port of Karachi but it faces land related issues. KP and Balochistan have natural resources, but they suffer from investors’ doubts due to political instability.

Unlike India, Pakistani provinces do not host large -scale investors meetings. Punjab and Sindh occasionally promote industrial areas but there is a shortage of aggressive international marketing. Foreign investment in Pakistan operates primarily by the federal government. The China Pakistan Economic Transit (CPEC), including projects, Gwadar and energy initiatives, are discussed at the federal level, in which the provinces have played a secondary role. Unlike some Indian states, no Pakistani province has an independent trade office abroad.

Although Punjab and Sindh have taken some steps, there is no competition for investment like India. To enhance their investment appeal, the provinces of Pakistan need maximum sovereignty, transparent rating and active marketing strategies.