South Asia Investor Review

The Russia-Ukraine war and the US-Israel-Iran war have recently demonstrated the effectiveness of drone warfare. Is the Pakistani military learning lessons from them to prepare for future conflicts? Let's examine the answer to this question based on recent announcements.  Pakistan's Long Range Drone D-248 Pakistan has revealed a 3,000-kilometer range one-way drone in July this year. The state-owned Heavy Industries Taxila (HIT) displayed two new long-range loitering munitions – the D-248 and the S-369 – at the 2026 Indus Robotics and Autonomous Systems (RAS) Expo on July 22–23, 2026 in Islamabad.   The D-248 drone uses a tailless delta configuration – similar to  Iran ’s Shahed-136 – and carries a maximum take-off weight (MTOW) of 240 kg, a wingspan of 3.3 m, a payload of 30-50 kg, a maximum speed of 225 kph, a cruise speed of 185 kph, an endurance of 12-14 hours, and a flight ceiling of up to 4,500 m.  Iran's Shahed drones have been used in both the Ukraine-Rus...

After installing over 50 GW of solar panels as of early 2026, Pakistanis are now adding batteries at a rapid pace. The country has imported nearly 7.6 GWh of batteries, with nearly 60% of that total arriving during 2025 alone. Pakistanis are now installing batteries at a rate exceeding 5 GWh annually, according to a recent report by  Renewable First . Batteries enable consumers to store excess solar electricity generated during daylight hours for use at night and to smooth out demand on the grid. Batteries also contribute to national grid stability, reducing costs and improving overall energy security for energy-import-dependent Pakistan.   Pakistan's Battery Boom. Source: Renewable First By FY25, 7.3 million households in Pakistan had solar installed on their rooftops; out of a total 40 million households in the country, that makes nearly 1 in 5 of all Pakistani homes, the report says. With the battery boom gaining pace, around 282,000 solarized households, roughly 4%, now ha...

Pakistan has historically enjoyed close friendly ties with Saudi Arabia and Turkey. So why did the three nations feel the need to formalize these ties with a mutual defense agreement in Mecca this week? Many answers to this question can all be traced to a fundamental change in the security environment in the Middle East. Foremost among these changes is the extremely reckless behavior of the state of Israel which has had full political, military, economic and diplomatic backing of the West. This unqualified western support began with the  Gaza genocide  and culminated in the launch of joint US-Israeli assault on Iran in February this year.   The entire Middle East region and the Islamic world has helplessly witnessed as the Israeli military butchered innocent civilians in Palestine and Lebanon and threatened to expand the war to the entire region. Some Israeli politicians issued warnings to Turkey and Pakistan. During this period, the West not only failed to restrain Israe...

Pakistan has long sought to  balance  its foreign policy between China and the United States through a pragmatic hedging strategy, gaining economic, military, and diplomatic benefits from both superpowers while maintaining strategic autonomy. But the relationship between Pakistan and China is not the same as the one between Pakistan and the United States. Pakistan's ties with China are strategic while those with the United States remain tactical and transactional. What has changed recently is that Pakistan is no longer waging war to help the United States as it did during the " Cold War " and the " War on Terror ". Instead, Pakistan has emerged as a peacemaker between the US and Iran.  Both China and US Are Courting Pakistan In a piece titled " Pakistan's Great Game ", French political scientist Christophe Jaffrelot has explained what he sees as Pakistan's "tactics and strategy" in dealing with the two superpowers. Here's a quote ...

Rogue AI agents are no longer just the stuff of science fiction. When an OpenAI rogue agent launched a cyber attack against AI startup Hugging Face this month, the company fought fire with fire, using an open-source Chinese AI model to defend against it.  During a test in a sandbox, an OpenAI autonomous agent managed to sneak out and attack a website operated by HuggingFace, an AI startup based in New York City. The OpenAI agent was not connected to the Internet but it found a way to access it and escaped its sandbox.  It took two days for Hugging Face to put an end to the attack, with help from GLM 5.2, an open weight system created by Chinese company Z.ai. All of this happened in the middle of a debate in the US about banning the use of Chinese AI models.  This incident gives one more reason to companies, including US-based firms, which are rapidly adopting  Chinese open-weight  AI models to save money. For example, Airbnb relies on Alibaba’s Qwen model, ...

On July 16 in Shanghai, 29 countries, including China, Pakistan and Russia, signed the founding agreement of WAICO, World AI Cooperation Organization.  Every BRICS founding member is in, except India. This agreement follows the launch of the US-led Pax Silica, a 24-member coalition, including  India , which is designed to counter China's AI efforts. The stated goal of both these competing groups is to provide global governance, including building guardrails and setting standards, for artificial intelligence (AI) technologies.  US-China AI Competition The announcement of WAICO coincided with the launch of Kimi K3 by  Chinese  startup Moonshot AI.  Kimi K3 is the largest open-weight AI model ever built, its full weights free for the world to download from July 27.  Cheaper open-source AI models like Kimi K3 pose a serious threat to U.S. proprietary models. By offering 80-90% of the capability at a fraction of the cost or for free, they are squeezing the ...

Pakistan's electricity demand has soared  21% in just two years . Rapid electrification is positively impacting all sectors of Pakistan's economy. thanks to growing deployment of distributed solar, estimated at 38 GW as of June, 2025. In 2025, 44% of solar deployment was residential, followed by industry (26%), agriculture (21%) and commercial users (9%). It is stimulating demand for a variety of products ranging from air conditioners and refrigerators to washing machines and electric scooters/motorbikes. As a result, Pakistan’s Large-Scale Manufacturing (LSM) sector grew by 6.5% in the fiscal year, rebounding from a –0.69% contraction the previous year.  The fiscal year saw a 61.66% surge in automobile production.  Impact of Solar Energy Revolution in Pakistan Dave Jones of   Ember , a global energy think tank, says Pakistan's experience with distributed solar could become the blueprint for dozens of developing countries.  If Pakistan is the first large-sc...

Policy-makers need data to formulate good policies. Good data produced by government agencies can be expected to lead to good policies and desirable outcomes. But data collection and statistical analyses require adequate methodologies and resources. Unfortunately, Pakistan's data quality gets a "C" grade by international agencies like the International Monetary Fund (IMF). Clearly the country faces significant data quality challenges.  These challenges range from estimation of the size and scope of the informal economy and electricity demand/consumption to education and nutrition.  Here are some examples of where the Pakistan Bureau of Statistics (PBS) data differs sharply from what is being reported by non-government groups:  1. Gross Domestic Product: A large chunk of Pakistan's economy is not documented . The PBS seems to be failing in making even the most rudimentary estimates of it. A 2024 joint study of the International Labor Organization and the Small and Medi...

Pakistan is experiencing soaring demand for electricity across all of the sectors of its economy. The new demand is being met by rapidly growing deployment of distributed solar, estimated at 38 GW as of June, 2025. In 2025, 44% of solar deployment was residential, followed by industry (26%), agriculture (21%) and commercial users (9%). The expansion of distributed solar has enhanced electrification across the economy, lifting Pakistan's  electrification  rate to 21.7% in FY2025 from 17% in FY2023, close to the global average of 22%. This surge to over 200 terawatt-hours of electricity is not reflected in official data, according to a report by  Ember Energy  titled "The solarization of Pakistan's energy economy".  The  solar energy revolution  in Pakistan is led by consumers. Driven by soaring electricity costs, unreliable grid infrastructure, and cheap imported solar panels, millions of households and businesses have installed rooftop solar. This rapi...

Dr. Danish Saleheen, a  Pakistani-American  professor at Columbia University, and his fellow researchers have published a comprehensive analysis of 173,303 genomes from Pakistan, one of the largest  genomic studies  ever conducted in South Asia. This landmark work is upending how scientists understand human genetics and drug development. "South Asians have been severely underrepresented in genome studies—comprising just 2% of global genomic databases despite representing 25% of the world's population," study leader Dr. Saleheen explained. The study is sponsored by Novartis, Columbia University Irving Medical Center, and the Center for Non-Communicable Diseases, Karachi, Pakistan. Its results could fundamentally transform drug discovery.  The study, published in the journal  Nature , has identified knockouts of nearly 6,500 genes—about one third of all protein-coding genes (exomes)—in 34,000 individuals. Cousin marriages are quite prevalent in Paki...

A 2024 joint study of the International Labor Organization and the Small and Medium Enterprise Development Authority  (SMEDA) estimated Pakistan's undocumented economy at $457 billion. While other South Asian nations, particularly Bangladesh and India, do include estimated undocumented GDP figures in their official GDP, Pakistan's official GDP figures do not include such estimates. If the Pakistani government decides to include estimates of the informal economy in its official figures, the country's GDP would jump to $1,059  billion in market exchange terms and over $4,000 billion in PPP terms.  Pakistan's Total GDP, including Undocumented, Estimated at over $1 Trillion In 2023 when the  ILO-SMEDA study  was conducted, Pakistan's official GDP was $340 billion (34% less than the undocumented GDP), bringing the total real GDP for 2023 to $797 billion. Pakistan's official GDP figure for 2025-26 is projected to be $452 billion. Assuming that the undocumented GDP has...

Ilyas Khan, the British Pakistan founder of Quantinuum, became a billionaire in the company’s IPO on NASDAQ last week. Khan is a pioneer in the revolutionary field of quantum computing which could speed up computing by orders of magnitude. It will have a huge impact in AI and encryption.  Dr. Irfan Siddiqui , a Pakistani-American professor of Physics at University of California at Berkeley, is another top expert in quantum computing.  Ilyas Khan, British Pakistani Founder of Quantinuum. Source: 2023 BLOOMBERG FINANCE LP Quantinuum raised $1.68 billion in an initial public offering last week, making its founder Illyas Khan a billionaire, according to  Forbes . The listing, which is the largest to date for a quantum startup, valued Quantinuum at over $15.6 billion after it sold 28 million shares at $60 each on June 3. Its shares opened at $58 per share on June 9. Khan, who owns around 15% of the company, is now worth $2.2 billion. Quantinuum uses a new type of quantum ...