FDI play important role in the development of Pakistan. But during the lost decade certain factors decline FDI in Pakistan. One of the factor is Terrorism. Terrorism in Pakistan made the people homeless, injured and dead, beside these affects terrorism also impact the economic condition of Paksitan. A large number of schools have been damaged. Infrastructure are highly destroyed. Communication become disturbed. So due to these factors the market of Paksitan is not profitable for the investors. in the last decade the investors are trying to search for the safer economy where they make more investment and increased profit. This study highlights the same phenomenon.