Pakistan’s information technology (IT) sector has achieved a historic milestone, with export earnings surpassing the $4 billion mark for the first time during the first eleven months of the current fiscal year, highlighting the industry’s growing importance as a key driver of economic growth and foreign exchange earnings.
According to data released by the State Bank of Pakistan (SBP), exports of IT and IT-enabled services, including revenues generated by software companies and freelancers, reached $4.184 billion during July-May FY2025-26, compared to $3.475 billion during the corresponding period of the previous fiscal year.
The sector registered a robust 20 percent year-on-year growth, with export receipts increasing by $709 million, despite challenges such as internet disruptions and geopolitical uncertainties during the year.
Industry analysts attributed the strong performance to supportive government policies, tax incentives, and sustained efforts to promote Pakistan’s technology sector in international markets. Measures aimed at facilitating foreign exchange inflows and encouraging foreign investment have also contributed to the sector’s continued expansion.
Although monthly inflows moderated slightly, overall export performance remained strong. IT export receipts stood at $373 million in May 2026, compared to $423 million in April 2026. With one month remaining in the fiscal year, industry observers expect total exports to approach $4.5 billion, although they may remain below the government’s ambitious target of $5 billion.
Commenting on the sector’s performance, prominent IT exporter Dr. Noman Said said Pakistan possesses considerable untapped potential to further increase technology exports and attract higher foreign exchange earnings. However, he cautioned that several structural challenges continue to constrain the industry’s growth.
“The IT sector has become a major contributor to Pakistan’s macroeconomic stability by supporting the current account, attracting investment, and creating employment opportunities,” he said.
Dr. Said emphasized the need for a comprehensive national strategy to strengthen the domestic technology ecosystem and sustain export growth.
“Our country requires a robust roadmap that focuses on education, training, and digital skills development while simultaneously exploring new international markets and deepening penetration in existing ones,” he said.
The sector’s outlook has been further strengthened by a series of incentives announced in the federal budget.
Among the most significant measures is the extension of the 0.25 percent Final Tax Regime (FTR) for IT exporters for another three years, providing greater policy certainty and long-term planning opportunities for businesses.
The government has also reduced the withholding tax on international transactions conducted through payment cards from 5 percent to 0.5 percent, a move expected to improve ease of doing business and encourage greater foreign exchange inflows.
Meanwhile, Pakistan Freelancers Association (PAFLA) Chairman Ibrahim Amin said freelancers have played a pivotal role in the sector’s growth, contributing more than 20 percent of total IT export earnings, with their exports crossing the $1 billion mark.
He noted that the number of freelancers and digital workers continues to grow as awareness of freelancing opportunities and access to digital skills training expand across the country.
According to Amin, emerging technologies such as artificial intelligence (AI) are expected to create new opportunities for Pakistani freelancers and software professionals, further strengthening the country’s position in the global digital economy.
With exports reaching record levels and policy support continuing, industry stakeholders believe Pakistan’s IT sector is well-positioned to remain one of the country’s fastest-growing export industries and a key contributor to future economic growth.- ER News Desk