While Washington focuses on domestic politics, Russia and Pakistan are forging economic ties that could reshape South Asia—and undercut decades of American influence in the region.
At a Glance
- Pakistan and Russia are reviving a defunct Soviet-era steel mill in Karachi on a 700-acre site near Port Qasim
- The project is expected to cut Pakistan’s steel imports by one-third and revive a plant closed since 2015 with $800 million in losses
- Russia’s growing economic footprint in Pakistan also includes oil and gas deals and critical infrastructure projects
- Pakistani officials frame the partnership as a pivot toward “independent” investment, away from Western dependency
- Critics argue the Biden administration is failing to counter this shift, risking long-term strategic losses in South Asia
Soviet-Era Project, 21st-Century Realignment
In a symbolic yet strategically significant move, Russia and Pakistan have agreed to resurrect a shuttered steel plant built during the Cold War. The site, dormant for years, will be revitalized with Russian funding and expertise—providing a modernized facility that could slash Pakistan’s reliance on imported steel and bolster its industrial base.
The plan calls for construction on the same Pakistan Steel Mills land near Port Qasim, promising enhanced efficiency through on-site logistics integration. For Russia, it’s a golden opportunity to gain leverage in a country long tied to U.S. foreign aid. For Pakistan, it’s a new direction—choosing economic cooperation with Moscow over dependency on the West.
Moscow’s Expanding Footprint
This isn’t Russia’s only inroad. The Kremlin has also partnered with Islamabad on the Pakistan Stream gas pipeline, proposed rail modernization projects like the Quetta-Taftan corridor, and discounted energy sales including crude oil and LPG. Russian Deputy Minister Aleksei Gruzdev and Pakistani officials have formed working groups to coordinate these ventures, which are seen as part of a broader strategy to deepen bilateral ties.
As Ambassador Khorev noted, the goal is a “comprehensive economic partnership,” spanning steel, energy, agriculture, and logistics. These are the sectors that build nations—not just military hardware or temporary aid programs.
A Missed Opportunity for the U.S.?
While Moscow funds infrastructure, Washington’s role in Pakistan has largely stalled. Years of U.S. economic aid have faded in both volume and visibility. Meanwhile, Russia is showing up with shovel-ready investments and strategic patience.
As Pakistani Special Advisor Haroon Akhtar Khan told investors, “This is an opportune time… Pakistan has emerged as a strong and safe destination for international business.” That line was once reserved for U.S. talking points—now it’s being used to welcome Russian influence.
Strategic Stakes, Global Silence
The consequences are clear: this steel deal is a gateway for long-term Russian influence in South Asia. While U.S. policymakers remain focused on domestic culture wars, Russia is expanding its sphere of economic influence—reminiscent of Beijing’s Belt and Road Initiative.
If this trend continues, the U.S. risks losing ground in a nuclear-armed state of 240 million people that borders China, India, and Afghanistan. Pakistan’s steel consumption per capita is still below global averages—meaning growth, and thus influence, is just beginning.
