The export performance of Pakistan’s IT and IT-enabled services (ITeS) industry has been rapidly increasing lately.
Export remittances for the industry reached $2.283 billion between July 2023 and March 2024, a significant increase of 17.37% over the $1.945 billion recorded during the same period in the previous fiscal year.
This remarkable development trajectory has been attributed to many sources. The State Bank of Pakistan’s (SBP) move to loosen foreign currency holding limitations has been a major factor in the rise in IT exports.
The Exporters’ Specialised Foreign Currency Accounts allowable retention limit for IT businesses was raised by the SBP from 35% to 50%.
By encouraging IT companies to bring their overseas profits home and deposit them into local accounts, this action increased the nation’s foreign exchange reserves.
Remitting foreign money to Pakistan from IT businesses has been made possible in large part by the constant value of the Pakistani rupee. A stable currency makes it more appealing for businesses to repatriate their profits to Pakistan by lowering the risk involved with foreign exchange swings.
IT exports had a notable increase in March 2024, reaching $306 million, the sector’s highest-ever monthly export amount.
This indicated a 36% rise from March 2023, underscoring the robust momentum in the industry. March 2024 saw a 19% increase in monthly IT exports over the previous month, a sign of steady expansion.
For the first nine months of the fiscal year (July through March), the sector’s export remittances increased by 17% on an annual basis to reach $2.28 billion. Net IT exports climbed by 16% to $1.99 billion over the same period after accounting for imports.
Finance Minister Muhammad Aurangzeb has projected that IT exports will reach $3.5 billion by the end of the fiscal year, indicating confidence about the sector’s development prospects. However, other analysts and industry professionals, such as Topline Securities, have more conservative projections. For the fiscal year 2023–2024, they predict that gross IT exports might be close to $3.0 billion.
A number of government organisations, notably the Pakistan Software Export Board (PSEB), the Special Investment Facilitation Council (SIFC), and the Ministry of IT and Telecommunication, have been collaborating to support the expansion of the IT and ITeS industries.
Their combined efforts have been directed towards making business easier, drawing in foreign capital, and encouraging worldwide company growth in the IT sector.
Notwithstanding its encouraging growth trajectory, Pakistan’s IT industry still confronts a number of obstacles that must be overcome in order to realise its full export potential.
Government policy has been inconsistent in this industry, which can lead to uncertainty and make long-term planning for enterprises more difficult.
To increase investment and offer clarity, tax laws and regulations that impact the IT industry must also be simplified. It is still difficult for IT firms to obtain financing and banking services that meet their demands, which hinders their capacity to grow and make innovative investments.
Pakistan’s IT and ITeS industries have shown strong export development, thanks to supportive legislative changes, a stable currency, and cooperative efforts from government agencies.
Although there is hope for the sector’s future growth, overcoming the current obstacles—such as inconsistent policies, taxation, and banking—will be essential to maximising the sector’s export potential and establishing long-term sustainable growth.
