Pakistan's IT exports set to hit $4.6bn

Pakistan's IT and IT-enabled services exports reached a record $4.6 billion in FY2025-26, rising 20.6 percent year on year from $3.814 billion the previous fiscal year — the highest annual export earnings the sector has ever recorded.

The result met the lower end of the government's $4.5 to $5 billion target range for FY26, falling roughly $400 million short of the $5 billion upper bound.

The Numbers

Monthly export receipts were above $350 million for most of the fiscal year. The peak was December 2025 at $437 million. June 2026 closed at $416 million — up 22.7 percent from $339 million in June 2025 and 11.5 percent from May 2026 — making it among the highest monthly figures on record.

Q4 FY26 alone generated $1.212 billion across April, May and June, the strongest quarter in the sector's history.

Net IT exports for the full year totalled $3.98 billion after accounting for outflows, with the sector posting a trade surplus of $3.9 billion.

IT services now account for 46 percent of Pakistan's total services exports — making it the country's largest services export category by a significant margin.

The Freelance Surge

Freelancer earnings crossed $1 billion for the first time in FY26, up 50 percent year on year. Freelance income now represents roughly 25 percent of total IT export value, a share that has risen sharply as Pakistani professionals expanded their presence on international digital platforms.

Remittances from Pakistani freelancers rose 78 percent to reach $1.76 billion during the fiscal year — a figure that reflects both the growing volume of freelance work and improving formalisation, as more workers route earnings through official banking channels rather than informal transfers.

What the Sector Contains

The $4.6 billion figure covers software and IT-enabled services, IT consultancy, freelance services, call centre operations and hardware-related consultancy. Software development and IT services make up the bulk. The call centre and BPO segment has grown steadily as international companies have expanded outsourcing relationships with Pakistani providers.

Why It Grew

Several factors contributed. The State Bank of Pakistan introduced regulatory measures that made it easier for IT companies to receive foreign currency payments and repatriate export proceeds. The Continued Final Tax Regime and a reduced 0.25 percent tax on export income reduced the cost of formal declaration, drawing more earnings into official figures. Domestic internet connections tripled from 1.9 million in 2024 to 5.1 million in 2026, expanding the addressable workforce.

Government spending on technology infrastructure — improved broadband connectivity, cybersecurity frameworks and digital public infrastructure — supported the expansion. The National AI Policy 2025 and a planned $1 billion AI sector investment were framed as part of the same strategy, aimed at moving Pakistan up the value chain beyond conventional software services.

The Gap and the Target Ahead

Crossing $4.6 billion is the sector's first time inside the government's stated target band, though the upper bound of $5 billion was not reached.

The next stated goal is considerably more demanding. The Uraan Pakistan plan targets approximately $10 billion in IT exports by FY2028-29. Based on the $4.6 billion FY26 figure, reaching $10 billion in three years would require adding $5.4 billion in annual receipts — roughly doubling the current level within 36 months.

At 21 percent annual growth, the sector would reach around $6 billion by FY29, not $10 billion. Sustaining the current growth rate gets Pakistan to roughly $8 billion by FY31. The $10 billion target by FY29 implies accelerating growth to around 30 percent per year, which is achievable but would require structural changes beyond continuation of current trends — broader addressable markets, higher-value services, or a step-change in AI-enabled delivery.

What Needs to Continue

P@SHA Senior Vice Chairman Muhammad Umair Nizam called the $4.6 billion figure a significant milestone reflecting the resilience and global competitiveness of Pakistan's technology industry, and pointed to continued government support and expanded monthly earnings as the expectations for FY27.

Industry experts have consistently identified the US and EU as priority markets where Pakistan's share remains small relative to its potential, alongside ASEAN and the Middle East as emerging opportunities. Deepening those market relationships — rather than relying on the same clients — is the route to higher export values without simply adding more workers at the same price points.

Sources: ProPakistani, TechJuice, Outsource Accelerator, Pakistan Today/PressReader