KARACHI:
Pakistan’s information technology sector is witnessing one of the most significant export surges in the country’s economic history, positioning itself as a critical pillar of foreign exchange earnings and services-led growth. In December 2025, Pakistan’s IT and IT-enabled services exports reached a record $437 million, marking the first time monthly receipts crossed the $400 million threshold.
According to data released by the State Bank of Pakistan (SBP), this figure represents an increase of around 23% on a month-on-month basis and approximately 26% year-on-year, underscoring the sector’s accelerating momentum and growing competitiveness in global markets.
This milestone is not an isolated spike but part of a sustained upward trend that has been building over several years. Official SBP statistics show that cumulative IT exports during the first half of FY2025-26 (July-December) stood at about $2.24 billion, compared to roughly $1.87 billion in the same period of the previous fiscal year.
This translates into around 20% growth, indicating that the sector is firmly on track to achieve – and potentially surpass – the widely discussed $5 billion annual export target. The consistency of growth across multiple months reflects structural strengthening rather than short-term volatility.
A look at historical data highlights how far the sector has come. A decade ago, Pakistan’s annual IT exports hovered around the $2 billion mark, with limited diversification and modest global visibility. By FY2024-25, IT and IT-enabled services exports had risen to $3.8 billion, according to SBP’s annual balance of payments data, recording 18% year-on-year growth despite global economic uncertainty.
Monthly export figures have repeatedly set new records, moving from around $342 million in March 2025 to $386 million in October 2025, and now reaching $437 million by December. This rapid succession of highs within a single fiscal year signals a structural shift in Pakistan’s export profile.
Several factors are driving this expansion, with policy reforms playing a central role. One of the most impactful measures has been the SBP’s decision to enhance exporters’ retention limits in Exporters’ Specialised Foreign Currency Accounts (ESFCA) from 35% to 50%. This reform has allowed IT companies to retain a larger share of their foreign exchange earnings, improving cash flow, facilitating reinvestment, and enabling firms to scale operations without excessive reliance on domestic financing.
Additionally, the introduction of the Equity Investment Abroad (EIA) framework has enabled IT exporters to use retained foreign currency to invest in overseas subsidiaries and partnerships, strengthening their global footprint and client access.
Global demand dynamics have also worked in Pakistan’s favour. As international firms increasingly outsource software development, cloud services, cybersecurity, and digital transformation projects, cost-competitive and skilled markets like Pakistan have gained prominence.
Pakistani IT companies have diversified their export destinations beyond traditional markets in North America and Europe to include the Gulf Cooperation Council (GCC) countries, Southeast Asia, and parts of Africa. Participation in international technology exhibitions and trade forums has further enhanced visibility and client acquisition for domestic firms.
Freelancers and small and medium-sized enterprises have emerged as major contributors to this growth. According to SBP and industry estimates, freelancers now account for a substantial portion of IT export receipts, particularly in software development, digital marketing, data analytics, and online consulting services.
Some official and semi-official estimates suggest that freelance-driven inflows alone could approach $800 million to $1 billion annually if current trends persist. This reflects the increasing formalisation of freelance earnings through banking channels, aided by digital payment solutions and awareness initiatives.
The broader economic implications of this export surge are significant. IT exports now constitute more than 40% of Pakistan’s total services exports, making the sector a critical stabiliser for the external account.
Unlike traditional merchandise exports, IT services are less dependent on imported inputs, meaning their net foreign exchange contribution is comparatively higher. At a time when Pakistan faces recurring balance-of-payments pressures, the expansion of IT exports provides a relatively resilient and scalable source of dollar inflows.
The IT sector creates high-value jobs for a young and educated workforce, aligning well with Pakistan’s demographic profile. According to official labour and industry estimates, hundreds of thousands of professionals are now directly or indirectly employed in IT and digital services, with strong multiplier effects across related sectors such as telecommunications, fintech, education, and professional services. The sector’s growth also supports entrepreneurship, as lower entry barriers allow startups and freelancers to access global markets with limited capital investment.
Pakistan appears increasingly capable of achieving the $5 billion annual IT export milestone. Maintaining monthly exports in the range of $400-450 million would place this target well within reach for FY2025-26. Analysts tracking SBP data project 18-20% growth for the full fiscal year, which would push total exports towards $4.5 to $5 billion by June 2026.
Beyond the immediate horizon, government planning documents envision even more ambitious targets, with national strategies aiming to scale IT exports towards $10 billion within the next three to four years, contingent on sustained reforms and capacity building.
Despite this progress, challenges remain. Infrastructure constraints, particularly the availability and reliability of high-speed broadband outside major urban centres, continue to limit the sector’s geographic expansion. While broadband penetration has improved significantly, disparities in service quality remain a bottleneck for remote work and outsourcing.
Skills development is another critical area. As global demand shifts towards advanced technologies such as artificial intelligence, machine learning, cybersecurity, and cloud computing, Pakistan must continuously update curricula and training frameworks to remain competitive.
Regulatory consistency and ease of doing business will also be decisive. While recent policy initiatives have improved exporter confidence, long-term growth will depend on predictable taxation, simplified compliance procedures, and continued facilitation of cross-border payments. The experience of past export sectors shows that policy reversals or uncertainty can quickly undermine hard-won gains.
The rise of IT exports is also generating positive spillovers across the economy. Increased foreign exchange inflows help stabilise the currency, ease import financing constraints, and support macroeconomic stability. The sector’s expansion encourages investment in digital infrastructure and innovation ecosystems, reinforcing Pakistan’s integration into the global digital economy.
As international demand for outsourced and remote IT services continues to expand, Pakistan’s cost advantage and growing talent pool provide a strong foundation for sustained growth.
The record $437 million in IT exports achieved in December 2025 is therefore more than a statistical achievement. It reflects a deeper transformation in Pakistan’s economic structure, signalling a gradual shift from reliance on traditional, low-value exports towards a knowledge-based, services-driven growth model.
With $2.24 billion already earned in the first half of FY26, the trajectory suggests that the $5 billion milestone is no longer aspirational but increasingly attainable. Sustaining this momentum through consistent policy support, skills development, and infrastructure investment could firmly establish the IT sector as a cornerstone of Pakistan’s long-term economic resilience and export strategy.
The writer is a member of PEC and holds a Master’s degree in EngineeringKARACHI
Pakistan’s information technology sector is witnessing one of the most significant export surges in the country’s economic history, positioning itself as a critical pillar of foreign exchange earnings and services-led growth. In December 2025, Pakistan’s IT and IT-enabled services exports reached a record $437 million, marking the first time monthly receipts crossed the $400 million threshold.
According to data released by the State Bank of Pakistan (SBP), this figure represents an increase of around 23% on a month-on-month basis and approximately 26% year-on-year, underscoring the sector’s accelerating momentum and growing competitiveness in global markets.
This milestone is not an isolated spike but part of a sustained upward trend that has been building over several years. Official SBP statistics show that cumulative IT exports during the first half of FY2025-26 (July-December) stood at about $2.24 billion, compared to roughly $1.87 billion in the same period of the previous fiscal year.
This translates into around 20% growth, indicating that the sector is firmly on track to achieve – and potentially surpass – the widely discussed $5 billion annual export target. The consistency of growth across multiple months reflects structural strengthening rather than short-term volatility.
A look at historical data highlights how far the sector has come. A decade ago, Pakistan’s annual IT exports hovered around the $2 billion mark, with limited diversification and modest global visibility. By FY2024-25, IT and IT-enabled services exports had risen to $3.8 billion, according to SBP’s annual balance of payments data, recording 18% year-on-year growth despite global economic uncertainty.
Monthly export figures have repeatedly set new records, moving from around $342 million in March 2025 to $386 million in October 2025, and now reaching $437 million by December. This rapid succession of highs within a single fiscal year signals a structural shift in Pakistan’s export profile.
Several factors are driving this expansion, with policy reforms playing a central role. One of the most impactful measures has been the SBP’s decision to enhance exporters’ retention limits in Exporters’ Specialised Foreign Currency Accounts (ESFCA) from 35% to 50%. This reform has allowed IT companies to retain a larger share of their foreign exchange earnings, improving cash flow, facilitating reinvestment, and enabling firms to scale operations without excessive reliance on domestic financing.
Additionally, the introduction of the Equity Investment Abroad (EIA) framework has enabled IT exporters to use retained foreign currency to invest in overseas subsidiaries and partnerships, strengthening their global footprint and client access.
Global demand dynamics have also worked in Pakistan’s favour. As international firms increasingly outsource software development, cloud services, cybersecurity, and digital transformation projects, cost-competitive and skilled markets like Pakistan have gained prominence.
Pakistani IT companies have diversified their export destinations beyond traditional markets in North America and Europe to include the Gulf Cooperation Council (GCC) countries, Southeast Asia, and parts of Africa. Participation in international technology exhibitions and trade forums has further enhanced visibility and client acquisition for domestic firms.
Freelancers and small and medium-sized enterprises have emerged as major contributors to this growth. According to SBP and industry estimates, freelancers now account for a substantial portion of IT export receipts, particularly in software development, digital marketing, data analytics, and online consulting services.
Some official and semi-official estimates suggest that freelance-driven inflows alone could approach $800 million to $1 billion annually if current trends persist. This reflects the increasing formalisation of freelance earnings through banking channels, aided by digital payment solutions and awareness initiatives.
The broader economic implications of this export surge are significant. IT exports now constitute more than 40% of Pakistan’s total services exports, making the sector a critical stabiliser for the external account.
Unlike traditional merchandise exports, IT services are less dependent on imported inputs, meaning their net foreign exchange contribution is comparatively higher. At a time when Pakistan faces recurring balance-of-payments pressures, the expansion of IT exports provides a relatively resilient and scalable source of dollar inflows.
The IT sector creates high-value jobs for a young and educated workforce, aligning well with Pakistan’s demographic profile. According to official labour and industry estimates, hundreds of thousands of professionals are now directly or indirectly employed in IT and digital services, with strong multiplier effects across related sectors such as telecommunications, fintech, education, and professional services. The sector’s growth also supports entrepreneurship, as lower entry barriers allow startups and freelancers to access global markets with limited capital investment.
Pakistan appears increasingly capable of achieving the $5 billion annual IT export milestone. Maintaining monthly exports in the range of $400-450 million would place this target well within reach for FY2025-26. Analysts tracking SBP data project 18-20% growth for the full fiscal year, which would push total exports towards $4.5 to $5 billion by June 2026.
Beyond the immediate horizon, government planning documents envision even more ambitious targets, with national strategies aiming to scale IT exports towards $10 billion within the next three to four years, contingent on sustained reforms and capacity building.
Despite this progress, challenges remain. Infrastructure constraints, particularly the availability and reliability of high-speed broadband outside major urban centres, continue to limit the sector’s geographic expansion. While broadband penetration has improved significantly, disparities in service quality remain a bottleneck for remote work and outsourcing.
Skills development is another critical area. As global demand shifts towards advanced technologies such as artificial intelligence, machine learning, cybersecurity, and cloud computing, Pakistan must continuously update curricula and training frameworks to remain competitive.
Regulatory consistency and ease of doing business will also be decisive. While recent policy initiatives have improved exporter confidence, long-term growth will depend on predictable taxation, simplified compliance procedures, and continued facilitation of cross-border payments. The experience of past export sectors shows that policy reversals or uncertainty can quickly undermine hard-won gains.
The rise of IT exports is also generating positive spillovers across the economy. Increased foreign exchange inflows help stabilise the currency, ease import financing constraints, and support macroeconomic stability. The sector’s expansion encourages investment in digital infrastructure and innovation ecosystems, reinforcing Pakistan’s integration into the global digital economy.
As international demand for outsourced and remote IT services continues to expand, Pakistan’s cost advantage and growing talent pool provide a strong foundation for sustained growth.
The record $437 million in IT exports achieved in December 2025 is therefore more than a statistical achievement. It reflects a deeper transformation in Pakistan’s economic structure, signalling a gradual shift from reliance on traditional, low-value exports towards a knowledge-based, services-driven growth model.
With $2.24 billion already earned in the first half of FY26, the trajectory suggests that the $5 billion milestone is no longer aspirational but increasingly attainable. Sustaining this momentum through consistent policy support, skills development, and infrastructure investment could firmly establish the IT sector as a cornerstone of Pakistan’s long-term economic resilience and export strategy.
The writer is a member of PEC and holds a Master’s degree in Engineering
