Pakistan in 2025 is a study in contrasts. On the foreign front, ties with China are deepening fast, but Islamabad is keeping one eye on Washington – playing both sides, and for now, getting away with it. There’s a cautious thaw with Bangladesh, a rocky reset with Afghanistan and the usual push and pull across the borders. Economically, the numbers are moving in the right direction – growth is back, inflation’s down, remittances are up – but dig a little deeper and it’s clear the foundations are still fragile. Security is where the alarms bells are really ringing. Terror attacks are rising, sectarian violence is back in the headlines, and separatist groups are stepping up their game. Overlay that with creeping digital censorship and heavy-handed crackdowns, and it’s not hard to see which way the wind’s blowing.
China. The Pakistan/China relationship has seen a fresh surge in 2025, with both sides doubling down on strategic cooperation while Islamabad quietly tests the waters with Washington. It’s a familiar balancing act – but one that Pakistan appears to be increasingly comfortable playing. President Zardari’s visit to Beijing in February set the tone. The two sides inked a raft of new deals, from major upgrades to Pakistan’s rail infrastructure to expanded investment in offshore oil and gas. Gwadar Port – the jewel in the China–Pakistan Economic Corridor (CPEC) crown – is getting another boost, with industrial zones and port operations back in focus after a slower 2024. CPEC itself is entering a second phase. The emphasis is shifting from big-ticket infrastructure to industrialisation, agriculture and digital connectivity – with Chinese funding still doing the heavy lifting. January also saw the launch of the New Gwadar International Airport, built with Chinese support and flagged as a key enabler for future trade and tourism. The space domain is now part of the partnership too. In January, Pakistan launched its first domestically built observation satellite, PRSC-EO1, with support from China. It’s a leap forward in Islamabad’s surveillance and tech capabilities, and another sign that the bilateral relationship is broadening beyond the usual economic script. That said, Islamabad isn’t closing off its options. In a move that raised a few eyebrows in Beijing, Pakistan has started exploring the import of US crude oil, part of a wider effort to reduce its trade imbalance with Washington and soften the blow from new US tariffs. It’s not a pivot, but it is a signal: Pakistan wants a more flexible foreign policy, one that can draw from both East and West without becoming captive to either. So far in 2025, the message is clear – Pakistan is tightening its bond with Beijing, but not at the expense of pragmatism. As regional competition intensifies and global dynamics shift, Islamabad is playing the long game, with China as its core strategic anchor, yes, but the US still very much in the calculus.
Afghanistan. Torkham – the lifeline between Pakistan and Afghanistan – reopened last month after nearly four weeks of closure triggered by border skirmishes. The standoff, triggered by a dispute over infrastructure, paralysed trade, stranded trucks and sent tensions soaring. It took a flurry of flag meetings and lots of local diplomacy to break the deadlock and get traffic moving again. The reopening was followed by a diplomatic push. Pakistan’s Special Representative for Afghanistan, Ambassador Muhammad Sadiq Khan, landed in Kabul for talks with Afghan Foreign Minister Amir Khan Muttaqi. The message was clear – time to calm the waters. Trade, terrorism and refugees topped the agenda, but the backdrop was anything but calm. Islamabad has ramped up its campaign to deport undocumented Afghan nationals — a move it frames as a matter of security and economic necessity. Human rights groups see it differently. They warn of mass deportations into the hands of the Taliban, with women, activists and former government employees at particular risk. Over 850,000 Afghans have already returned since the crackdown began. Thousands more are now on notice. Pakistan has given Western nations until the end of April to step up resettlement efforts, or face the consequences of a hard border policy. The optics are blunt; Pakistan won’t play host indefinitely. Implementation, though, is patchy. Punjab is pressing ahead, while Khyber Pakhtunkhwa, with its deep cross-border ties and political sensitivities, has slowed to a crawl. Opposition figures linked to Imran Khan have pushed back, wary of alienating local support or inflaming unrest. So while Torkham’s reopening may have restored the flow of goods, the bigger picture remains fraught. Pakistan is trying to balance domestic pressure, international optics and a fragile relationship with Kabul, all while managing one of the region’s most complex refugee situations. It’s a delicate act, and one that’s looking harder to sustain by the day.
Bangladesh. After 15 years of diplomatic silence, Pakistan and Bangladesh are finally talking again. The reset comes on the heels of former Prime Minister Sheikh Hasina’s exit, with interim leader Muhammad Yunus signalling a pivot away from Dhaka’s traditionally pro-India stance. The result? A noticeable thaw in ties with Islamabad. Since the shift, both sides have moved quickly – military engagement is back on the table, maritime exercises are underway, direct trade has resumed and visa restrictions are easing. It’s a strategic recalibration that’s also driving a wedge between Bangladesh and India. New Delhi has taken a harder line, sheltering Hasina and pulling the plug on key trade and visa routes – further fuelling the tilt towards Pakistan. Even so, the past hasn’t disappeared. In Dhaka, Bangladeshi officials raised familiar demands – a formal apology and USD4.52 billion in reparations for alleged atrocities committed by Pakistani forces during the 1971 war. Islamabad didn’t budge, but both sides made it clear they’re willing to look ahead. Trade, agriculture and broader cooperation are now in the frame and, while trust will take time, the door is finally open again.
Legislation. In January, Pakistan’s parliament enacted amendments to the Prevention of Electronic Crimes Act (PECA), criminalising the spread of “fake or false information” with penalties of fines or up to three years in prison. The amendments also create four new government-controlled bodies to regulate online content. Rights experts and media advocates have widely condemned the bill for undermining what little is left of digital expression in the country and for containing vague, overbroad language. For starters, the Act fails to define what actually counts as fake. It also leans on terms like “public order”, “national interest” and “morality” – all notoriously elastic phrases that can be twisted into catch-alls for anything the government finds inconvenient. There are plenty more holes to pick, but let’s be honest – this is a legal tool dressed up as reform, and we’re not buying it. At its core, it hands authorities sweeping powers to silence journalists, crush dissent and police public discourse. It’s a clampdown on digital rights, plain and simple.
Numbers. The economy’s finally moving again, but no one is pretending it is plain sailing. Growth is pencilled in at 3.0% – a decent lift after years of stagnation, though hardly a boom. Inflation has dropped off a cliff, down to 2.4% in January from well over 30% last year. That’s a win – but it’s not the full picture. Unemployment is still high, debt repayments are piling up, and the Rupee, while steady for now at around PKR279.69 to the Dollar, is far from bulletproof. Pakistan owes USD22 billion in external debt repayments this year – and that’s where the pressure’s coming from. The government’s pitching hard for foreign capital and trying to plug outflows, but let’s be clear… without serious traction, the Rupee stays vulnerable and the pain keeps coming. There is one solid patch of good news however; remittances. They’re up nearly 32%, hitting USD20.8 billion in the first half of the fiscal year. That’s more than just a number. It’s a vital cushion. The Pakistani diaspora is keeping consumption afloat and shoring up reserves. With external risks still looming large, that flow of support could end up doing more heavy lifting than anything coming out of Islamabad.
Diaspora. But it is not only the diaspora cash cow the government is after – it wants its political support and votes too. Expatriate Pakistanis have been huge supporters of Imran Khan and his PTI party. The Sharif government wants to change that and they are not being subtle about it. Last week’s Overseas Pakistanis Convention in Islamabad was framed as a tribute to expat contributions, but the subtext was strategic: reclaim the narrative, break PTI’s grip, and turn remittance loyalty into political capital. Sharif’s promises – legal fast-tracks, education quotas, investment perks. -these weren’t just policy sweeteners, hey were signals. To expats: we’ll listen. To PTI: we’re not ceding ground. And the timing matters. Despite Khan’s call last year for a remittance boycott, as you can see the money kept flowing – record highs remember – in fact. That undermines PTI’s claim to diaspora dominance. The state has clocked this, and it’s now playing the long game: institutional legitimacy over populist noise. The message from Islamabad is clear – support the state, not the spectacle. So far KHan has remained silent on this but we anticipate he won’t stay so for long.
Hijack. On 11th March the Jaffar Express train was hijacked in Balochistan leading to a day long standoff with security forces. 339 hostages were later rescued but 64 (hostages and insurgents) were killed during the incident while 38 more were injured. The Balochistan Liberation Army claimed responsibility. This incident marks a dramatic escalation of separatist militancy and which triggered a wave of protests across the country. Pouring fuel on that fire was the arrest of Mahrang Balock – a well-known rights activist. His detention provoked protests not just in Balochistan – demonstrations popped up in major cities like Karachi. Security forces responded with force – deploying tear gas and arresting dozens of protestors.
Karachi. On 18th April, a member of the Ahmadi minority community, Laeeq Cheema, was beaten to death by a mob of Islamists near an Ahmadi place of worship in Karachi. The attackers were reportedly affiliated with Tehreek-e-Labbaik Pakistan (TLP), a radical Islamist party. The mob also attempted to damage the place of worship during a demonstration.
Terrorism. Pakistan has entered 2025 on the back foot when it comes to security. The country has seen a sharp uptick in militant violence, with the Global Terrorism Index naming it the world’s second most terrorism-affected nation. Behind much of the bloodshed is the Tehreek-e-Taliban Pakistan (TTP), now the fastest-growing terror group globally and responsible for over half of all terrorism-related deaths in the country last year. This year is already off to a brutal start. In February, a suicide bomber hit a seminary in Nowshera, killing Maulana Hamidul Haq Haqqani and six others. Then came March, with the train hijacking we detailed above. Only weeks later, a roadside bomb in Mastung killed three security officers and wounded 18 more. The attacks are getting closer to one another and appear to be getting bolder too. The numbers don’t look good either. In the first three months of 2025 alone, terrorism incidents jumped 81% compared to last year. That’s 80 attacks, 218 dead. Khyber Pakhtunkhwa and Balochistan remain the hardest hit and there’s no sign that things are slowing down. On the regional front, tensions remain high. Pakistan’s deportation of Afghan nationals has rattled Kabul, while the recent killing of eight Pakistanis in Iran’s Sistan and Baluchistan province has added strain to Islamabad-Tehran ties. So what was the State’s response? Operation Azm-e-Istehkam – a sweeping military campaign aimed at rooting out militant networks, with reports of strikes on TTP camps across the border in Afghanistan. Still, the scale and pace of the violence suggest that Pakistan’s counterterrorism strategy has a long way to go. The bottom line: militancy is resurging, cross-border tensions are heating up, and Pakistan’s internal security remains on a knife edge.
So far, 2025 has been more grind than glide. Foreign policy is getting smarter for sure but security is slipping. The economy is breathing again, but not standing tall. And while the government talks modernisation, the tools it’s using are more muzzle than reform. What we’re seeing is a country juggling too many pressures – economic, political, regional – and that leaves no wiggle room for a misstep.. There is movement and there is momentum, but there’s also a growing sense that Pakistan is holding it all together with grit, not glue. What it needs now is stronger cement – and fast. The cracks are showing, and without prompt attention, they’re only going to widen.