Pak, US relations enter new phase as investment drive gains momentum

October 01, 2025 (MLN): Pakistan and the United States are deepening cooperation in energy, mining, and technology as both sides move to rebuild economic and military ties.

Pakistan is also planning to host an investor conference in Washington later this month to attract American investment, with Finance Minister Muhammad Aurangzeb noting that key sectors have been identified where Pakistan seeks US capital and where American investors show appetite, as Bloomberg reported.

Last week, Prime Minister Shehbaz Sharif and military chief Asim Munir met former US President Donald Trump at the White House, where Trump praised both leaders as “very great guys.”

Trump lauded Pakistan after being credited by officials with helping end a four-day conflict with India in May a claim New Delhi denies. Sharif’s government also said it nominated Trump for a Nobel Peace Prize.

During the engagement, the US declared a $500 million investment by U.S. Strategic Metals, while Pakistan promoted American interest in its oil and gas sector.

Trump highlighted what he called Pakistan’s “massive oil reserves,” despite declining production.

Security relations between Islamabad and Washington have historically swung between close cooperation and friction, while the US has simultaneously built ties with India as a counterbalance to China.

Recently, however, tensions emerged in US-India relations, with Trump criticizing New Delhi for purchasing Russian oil and imposing a 50% tariff in August, Bloomberg noted.

Aurangzeb said progress with Washington followed a new trade agreement that fixed tariffs at 19%  lower than regional peers and significantly below India’s rate.

He further emphasized that the deal boosted Pakistan’s export competitiveness and helped stabilize the economy.

“The first thing was to get the trade equation out of the way, which it is now,” he said. “Every single industry in Pakistan has to have an export component, because it’s the only way we’re going to get out of this boom-and-bust cycle.”

Pakistan narrowly avoided default in 2023 with IMF loans, and an IMF mission is currently reviewing its progress under the $7 billion program. Aurangzeb said the review was “largely on track,” adding that Pakistan paid off a $500m bond due Tuesday.

Prime Minister Sharif told IMF Managing Director Kristalina Georgieva last month that Pakistan is making steady progress on program targets. Global ratings agencies S&P, Fitch, and Moody’s upgraded Pakistan’s credit ratings this year, citing improved revenues and stronger finances.

Investor appetite has surged, with Pakistan’s dollar bonds yielding nearly 22% returns this year and the benchmark stock index gaining 44% both among Asia’s top performers.

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