Pakistan’s IT exports are one of the few bright spots in the external account. At a time when the country is struggling with weak investment, recurring balance of payments pressure and limited export diversification, IT has kept bringing in dollars.
According to the PBC-CDPR report, Expanding Pakistan’s IT Footprint, computer services exports rose from $1.67 billion in FY21 to $3.24 billion in FY25, while broader ICT exports reached $3.81 billion.
That is not a small achievement. The sector has grown through macroeconomic stress, inflation, currency volatility, and weak domestic demand. It has also generated a sizeable trade surplus, something Pakistan badly needs. But the report’s more important message is not that IT exports are growing. It is that this growth is still fragile.
It locates this fragility in the composition of exports. Pakistan’s IT export base is still heavily tilted towards low- to mid-value services, freelancing, staff augmentation, and business process outsourcing. These are the segments where Pakistan has benefited from cost advantage and flexible labour. But they are also the segments most exposed to AI, automation, and price compression.
The clearest example, as the report highlights, is freelancing. It dominates the number of recorded IT export transactions but contributes a much smaller share of value. In simple terms, activity is expanding faster than depth.
The report also points to a sharp fall in median freelance transaction value between FY21 and FY25, even though total freelance exports increased. More people may be earning through digital work, but the value captured per transaction is weakening.
This is where the headline export number can mislead. Rising exports do not automatically mean rising competitiveness. A sector can grow in volume and still remain vulnerable if most of the growth is coming from fragmented, low-value and effort-based work.
The study’s warning on AI is important here. AI is already reducing the value of basic coding, content, design, annotation and support tasks. More importantly, it is weakening the old outsourcing model built around selling hours.
The market is shifting towards outcomes, domain knowledge, product ownership, brand credibility, and delivery maturity. These are precisely the areas where Pakistan still has to catch up.
The report also highlights a data problem. It argues that the official export number may understate the true size of the sector.
Some IT earnings are classified as personal remittances, while revenues of foreign-registered Pakistani-founded firms are not fully captured in the domestic export framework. Pakistan may already have a larger IT economy than official data suggests. The problem is that the state is not measuring, classifying, or supporting it properly.
Another important finding is that the formal IT base is too thin. Many registered IT companies remain micro-scale entities, while very few have grown into large, listed or globally recognized firms. Serious export growth cannot rest only on individual freelancers or small teams.
The finding on talent is equally relevant. Pakistan often celebrates its youth bulge and pool of IT graduates. But the report notes that only a small share of IT graduates is immediately employable. The issue is not just coding. It is communication, professional conduct, reliability, delivery discipline, and client handling. Pakistan does not only have a tech-skills problem; it has an employability and execution problem.
The research uses Indiarightfull as a useful benchmark. India’s IT rise was not built only on cheap software labour. It built domestic digital platforms, created reference projects, attracted multinational captives and developed a stronger innovation and IP ecosystem.
Pakistan has no comparable domestic reference base like India’s Aadhaar, UPI and MOSIP, leaving local firms to win global trust without first being trusted at home.
The report also identifies captive operations as a missing piece. Captives bring stable demand, global delivery standards, managerial depth, training systems, and integration into multinational value chains.
Pakistan has attracted very few such operations compared to India and the Philippines. That is both a missed investment opportunity and a missed capability-building opportunity.
Country branding adds to the challenge. The report notes that Pakistan is often not even in the consideration set for global IT procurement.
Buyers are not just buying talent. They are buying reliability, compliance, political stability, cybersecurity comfort, and confidence in the operating environment.
The regulatory diagnosis is also blunt. On paper, IT is a priority. In practice, firms and freelancers face tax uncertainty, banking friction, payment delays, weak FX flexibility, and fragmented oversight.
The tax gap between formal employment and freelance or remote work encourages talent to leave firms. The absence of a clear freelancer definition creates confusion for workers, banks and tax authorities.
Payments and foreign exchange rules are another constraint flagged by the report. IT exporters need to receive international payments quickly, hold foreign currency, pay overseas vendors, use cloud services and manage global operations. The current system does not fully support this reality. As a result, keeping money offshore often becomes the rational choice.
The reforms suggested by the report are not mysterious. Pakistan needs a clear freelancer and remote-worker framework, functional dollar accounts, multi-currency receiving, card-payment access, faster remittance processing and safe harbour for legitimate IT export income.
Provincial IT service taxes should be harmonized, internet taxation reduced, cloud inputs treated as export enablers, and public procurement redesigned so domestic firms can build reference projects at home.
Pakistan’s IT exports have momentum. But momentum is not resilience. The country has a narrow window to turn a growing but fragile sector into a serious export engine. The lesson from the report is simple: Pakistan must not just export more IT work. It must export better IT work.