Pakistan’s IT exports surpass $4bn for first time

Pakistan’s Information Technology (IT) sector has achieved a historic milestone, with export earnings crossing the $4 billion mark for the first time during the first eleven months of the current fiscal year, underscoring the industry’s growing contribution to the national economy.

According to data released by the State Bank of Pakistan (SBP) on Wednesday morning, exports of IT and IT-enabled services—including earnings generated by software companies and freelancers—reached $4.184 billion during July-May FY2025-26, compared to $3.475 billion in the corresponding period of the previous fiscal year.

The sector recorded a robust year-on-year growth of 20 percent, with export receipts increasing by $709 million. The performance is particularly significant given the challenges faced by the industry during the year, including internet disruptions and geopolitical uncertainties.

Analysts attribute the continued growth in IT exports to supportive government policies, tax incentives, and sustained efforts to promote Pakistan’s technology sector in international markets. Measures are aimed at facilitating foreign exchange inflows and attracting foreign direct investment (FDI) have also contributed to the sector’s expansion.

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Despite a moderation in monthly inflows, export earnings remained strong. IT export receipts stood at $373 million in May 2026, compared to $423 million in April, 2026. With one month remaining before the close of the fiscal year, total exports are expected to approach $4.5 billion, although they may fall short of the government’s target of $5 billion.

Commenting on the sector’s performance, IT exporter Dr Noman Said has stated that Pakistan possesses significant untapped potential to further increase IT exports and attract higher foreign exchange earnings. However, he noted that several structural gaps continue to hinder the sector from realizing its full growth potential.

He emphasized that the IT industry has emerged as a key contributor to Pakistan’s macroeconomic stability by supporting the current account balance, attracting investment inflows, and creating employment opportunities.

“Our country needs a comprehensive roadmap to strengthen the domestic IT ecosystem and sustain the impressive growth in exports,” he said. “This requires a robust education and training framework to equip the workforce with in-demand digital skills, while simultaneously exploring new international markets and deepening penetration in existing ones.”

The outlook for the sector remains positive following a series of incentives announced by the government in the federal budget. Among the key measures is the extension of the 0.25 percent Final Tax Regime (FTR) for IT exporters for the next three years, providing long-term policy certainty for businesses operating in the sector.

Additionally, the government has reduced the withholding tax on international transactions made through payment cards from 5 percent to 0.5 percent. Industry stakeholders believe these measures will improve the ease of doing business, enhance competitiveness, and encourage greater foreign exchange inflows.

Chairman of the Pakistan Freelancers Association (PAFLA), Ibrahim Amin, said freelancers have played a significant role in driving the growth of IT exports, contributing more than 20 percent of the sector’s overall export receipts, crossing $1 billion.

He noted that the number of freelancers and digital workers in Pakistan continues to rise as awareness of freelancing opportunities and access to digital skills training increase among students and young professionals.

Looking ahead, Amin said the growing adoption of artificial intelligence (AI) and AI-related skills is expected to create new opportunities for Pakistani freelancers, further boosting export earnings and strengthening the country’s position in the global digital economy.