Pakistan’s Sukuk issuance has reached Rs4.4 trillion in 2026, registering a 113% increase compared with the previous year, as the government accelerates efforts to expand Islamic financing and develop the country’s Sharia-compliant capital market. Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb announced the figures during a ceremony marking the completion of approximately Rs10 trillion in cumulative Sukuk issuance. The event was held alongside the issuance of Government of Pakistan Hybrid Sukuk and Short-Term Sukuk, highlighting the government’s efforts to diversify its financing instruments and strengthen the role of Islamic financial products in the domestic debt market. Aurangzeb described the increase as a significant expansion rather than incremental growth, pointing to the rising contribution of Sukuk to the government’s financing strategy.
According to the finance minister, Pakistan’s Sukuk issuance stood close to Rs2 trillion in 2025, compared with approximately Rs761 billion in 2020. The latest issuance of Rs4.4 trillion in 2026 represents a substantial increase over both periods, translating into a five-year compound annual growth rate of around 22%. The growth reflects the government’s expanding use of Islamic securities as part of its sovereign financing arrangements. Aurangzeb said the government would continue working towards diversifying the Sukuk market and introducing greater flexibility in the instruments available for public financing. He also highlighted the importance of developing structures that can accommodate different investor requirements while maintaining compliance with Sharia principles.
One of the developments highlighted by the minister was the introduction of Government of Pakistan Hybrid Sukuk in coordination with the State Bank of Pakistan (SBP). These instruments combine different Sharia-compliant structures and provide greater flexibility in the utilisation of government-owned assets for sovereign financing. Aurangzeb also referred to the introduction of shorter-tenor Sukuk, particularly instruments with maturities of three to six months, describing them as an important development in addressing a gap within the Islamic debt market. Citing Maulana Taqi Usmani’s views, he noted that the availability of shorter maturities would contribute to establishing a more credible Sharia-compliant yield curve across different investment periods. Such a yield curve can provide investors and financial institutions with additional reference points when evaluating Islamic investment opportunities.
Discussing foreign portfolio investment, Aurangzeb said inflows through Special Convertible Rupee Accounts (SCRAs) had remained positive in Treasury Bills and Pakistan Investment Bonds (PIBs) over recent months, while foreign investment in Sukuk continued to remain below expectations. He stressed the need to increase international awareness and participation in Pakistan’s Sharia-compliant government securities market. According to the minister, banks, primary dealers and brokerage firms should work collectively to promote Sukuk among international investors and encourage greater diversification of foreign portfolio investments towards Islamic financial instruments. Expanding overseas participation could help broaden the investor base, improve market liquidity and strengthen the position of Sukuk within Pakistan’s overall sovereign financing framework.
The finance minister also emphasised the importance of making Sukuk accessible to individual investors through digital platforms. He said telecom companies and the State Bank had developed a platform intended to facilitate retail participation in Sukuk investments. Aurangzeb stressed that access to Islamic government securities should not remain restricted to institutional investors or individuals with substantial financial resources. He said even a person with Rs5,000 should be able to participate in the market, with investment capacity expanded through digital channels. Greater accessibility through technology could allow smaller investors to participate in government securities while supporting wider financial inclusion and increasing public engagement with Sharia-compliant investment products.
Turning to the long-term corporate debt market, Aurangzeb said Pakistan needed to move towards the development of listed Sukuk to create additional financing opportunities for businesses and infrastructure companies. He disclosed that the Ministry of Power had issued a mandate to a national grid company, which was currently working towards launching its first-ever listed Sukuk. The successful issuance of this instrument could establish a benchmark for other corporate entities considering similar financing arrangements. He further stressed that the Securities and Exchange Commission of Pakistan (SECP), State Bank, Pakistan Stock Exchange (PSX) and Central Depository Company (CDC) must maintain close coordination to build a comprehensive Sukuk market ecosystem. The finance minister reiterated that the Ministry of Finance and the federal government remained committed to developing a deeper, more diversified and liquid Islamic capital market.
Beyond financial market development, Aurangzeb also discussed the importance of learning, reflection and informed reasoning within society, referring to Quranic teachings during his address. He highlighted the importance of reading, understanding and reflecting upon religious teachings rather than limiting engagement to their recitation. He also emphasised the value of identifying common ground despite differences and encouraging respectful discussions that contribute to collective understanding. Referring to the contributions of Islamic scholars, including Maulana Taqi Usmani, he acknowledged the role of decades of scholarship in shaping modern Islamic finance. He added that Ijtihad, informed reasoning and continued scholarly discussion remained important as new economic and financial questions emerged. The minister called for an environment in which knowledge could be shared, questions discussed respectfully and different perspectives considered in developing Islamic financial practices.
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