Its a mater of marketing.
India isnt necessarily better then Pakistan in terms of investor climate. An objective look at India reveals a country where poverty is rampant, terrorism is not unheard of, and corruption is often endemic. Many of the same problems that effect Pakistan are also there in India…
The issue is of PR and marketing. India has done a good job in terms of self promotion. So foreign investors overlook certain issues in India, while the same problems become prominent in Pakistan… So while in India, 75 policemen can be murdered in some remote corner of the country and no one blinks an eye, if the same were to happen in Pakistan, it would be enough to alarm bells among investors.
So ultimately, its not about extremism as India probably has far more of those then Pakistan. Its an issue of marketing. Pakistan can have Millions of extremists, but if you only present the side of your country that you think is worth presenting, then extremism is irrelevant.
The fact that Pakistan does have multinationals and home grown companies as well doing relatively well, illustrates the fact that ground reality doesn’t conform to perception.
The reason many local companies haven’t become multinational has a lot to do with policies of the past. In particular the socialist govt take over at the hands of the Bhutto govt in the 70’s.