Pakistan decides to renegotiate investment treaty with Sweden

According to Business Recorder, the federal Cabinet has approved withdrawing Pakistan's termination notice for its investment treaty with Sweden, a step that had been set to end the pact on September 28, 2026. Ministers agreed unanimously to the move and asked for talks on updating the 1981 agreement. Their worry was that letting the treaty lapse could damage investor confidence and economic ties with Sweden and other nations.

The Board of Investment said the 1981 treaty was signed in March that year and took effect in June, with termination requiring one year's notice under Article 11. Under the existing clause, Swedish investments would have kept protection for 20 years after termination, which could have made Sweden reluctant to negotiate a replacement. The BoI also noted that earlier treaties from the 1990s and early 2000s contained broad provisions that exposed Pakistan to costly international arbitration.

Prime Minister Shehbaz Sharif has ordered a committee to examine why the notice was issued and to draft guidelines for similar notices in future. The Cabinet also wants the grounds and approvals behind the original decision established. Separately, the Prime Minister has asked the SIFC and BoI to prepare a plan to revamp the Board, including hiring specialists in investment treaties.