IT exports cross $1.8bn, up 21% in H1FY25

LAHORE: Pakistan’s IT exports have demonstrated remarkable growth, surging to $1.86 billion in the first half of the fiscal year 2024-25, despite challenges such as intermittent and slow internet connectivity.

According to data released by the State Bank of Pakistan (SBP), IT and IT-enabled services exports recorded a substantial increase of 21 per cent, or $408 million, compared to $1.456 billion during the same period in the previous financial year.

Since October 2024, the IT industry has consistently reported monthly export receipts exceeding $300 million, reaching a record high of $348 million in December 2024.

“The impressive growth in IT exports is the result of collaborative efforts by the government, IT companies and their representative bodies,” said Umair Nizam, senior vice chairperson of Pakistan Software Houses Association (P@SHA). He highlighted the aggressive strategies adopted by Pakistani IT companies to explore opportunities in non-traditional markets like GCC countries, alongside traditional markets, which have contributed significantly to the sector’s expansion.

Pakistani IT firms have been engaging with international clients, particularly in the US and the GCC, securing projects through participation in global events such as Oslo Innovation Week 2024, the Pak-US Tech Investment Conference, Singapore Tech Week, Singapore Tech Festival, GITEX and others. The participation of foreign delegates in local trade fairs has also opened doors for export orders.

Projections indicate that IT exports could surpass $4 billion by the end of the current fiscal year if the current growth trajectory continues.

Dr Noman Said, an IT exporter, pointed to key factors driving the sector’s upward trajectory, including the SBP’s decision to increase the retention limit for Exporters’ Specialized Foreign Currency Accounts from 35 per cent to 50 per cent. The introduction of the Equity Investment Abroad (EIA) category has also enabled IT exporters to acquire shares in foreign entities using up to 50 per cent of retained export proceeds. These measures have bolstered confidence among exporters, encouraging them to repatriate earnings.

A stable Pakistani rupee (PKR) has further incentivised exporters to remit a higher portion of profits back to Pakistan, contributing to the rise in export figures, said Dr Noman, CEO of SI Global Solutions.

He suggested that regulatory authorities simplify export procedures to reduce bureaucratic hurdles and facilitate market entry for new exporters. He called for short-term and long-term credit facilities, particularly for small and medium enterprises (SMEs) in the IT sector.

Dr Noman also stressed the need for aligning the IT curriculum with global technological advancements, introducing fields like artificial intelligence, cybersecurity and data analytics to enhance the workforce’s competitiveness.

The IT sector is currently the third-largest contributor to exports after textiles and rice, accounting for 46.5 per cent of the country’s overall service exports, which stood at $4 billion in the first half of FY25. Under the ‘Uraan Pakistan’ national economic plan, the government has set an ambitious target of $10 billion in IT exports by FY29, with a projected compound annual growth rate (CAGR) of 28 per cent.