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Pakistan’s IT Exports Surge to $691 Million in July–August FY26

Pakistan’s IT Exports Hit US$691 Million in First Two Months of FY 26: Momentum Builds, But Road Ahead Still Demanding

Overview

Pakistan has kicked off Fiscal Year 2025-26 with a strong showing in its Information Technology (IT) export sector: in July and August 2025, IT export receipts reached US$691 million, marking an 18% year-over-year increase over the same period in FY25, when exports were US$584 million.

This growth underscores the rising importance of IT not only to Pakistan’s export base, but to stabilising macroeconomic indicators—particularly the current account. Yet, while the upward trend is encouraging, scaling to meet more ambitious targets will require addressing key structural challenges.


What’s Driving the Growth

Several factors are fueling this surge in exports. They interact in complex ways, but together they paint a picture of both opportunity and emerging constraints.

DriverDetails / Examples
Government Incentives & Policy SupportMoITT and the State Bank of Pakistan have introduced financial and regulatory incentives designed to lower barriers for exporters, including banking reforms and favorable treatment of export earnings.
Global Market Penetration / Trade Fairs, RoadshowsPakistani IT firms are increasing presence in tech fairs, roadshows, and trade missions, especially targeting markets like USA, UK, Europe, and GCC. These efforts are helping in acquiring new clients and partnerships.
Growth in Freelancing & Capacity BuildingThe freelancing community is contributing significantly. Training programmes, both through NGOs and public-private partnerships, are boosting the pool of skilled remote workers who can take up global contracts.
Enhanced Export Receipts via Financial MechanismsMechanisms for exporters to retain foreign currency, favourable repatriation policies, and easier banking channels are helping to improve revenue flow.

Snapshot: Month-by-Month & Targets

  • August 2025 export receipts were reported at approximately US$337 million. This reflects about 13% growth YoY for August, though a slight dip compared to July.
  • To meet the government’s target of US$5 billion in IT exports for FY26, industry stakeholders believe monthly receipts need to be in the range of US$400-450 million in the coming months.

How Significant is This Sector?

  • IT remains the third largest export sector in Pakistan, after textiles and rice.
  • It contributes the largest share in services exports, making it a key lever for improving the services trade balance and supporting the current account.

Challenges: What’s Holding Back Faster Growth

While growth is solid, several constraints could hamper both the speed and sustainability of expansion.

  1. Skilled Talent & Skill Upgradation
    Global IT clients demand cutting-edge skills—AI, machine learning, cybersecurity, cloud services, etc. While freelancing and training are helping, there remains a gap in supply of highly-specialised talent, especially for large-scale or high-value contracts.
  2. Infrastructure & Connectivity
    Reliable high-speed internet, electricity, and streamlined regulatory processes remain uneven, particularly outside major urban centres.
  3. Consistency & Predictability in Policy
    Incentives, financial mechanisms, and regulatory supports need to be stable and long-term. Frequent policy changes or uncertainty can reduce investor and exporter confidence.
  4. Competitive Pressures Globally
    Countries with better cost structures, incentives, or more favourable currencies may become more attractive. Also, AI and automation are double-edged—offering productivity boosts but reducing demand for human labour in certain segments.
  5. Export Earnings Repatriation & Foreign Currency Issues
    Exporters continue to face hurdles in bringing back earnings, dealing with foreign exchange risks, and managing costs of doing business in international markets.

Industry Voices

  • Muhammad Umair Nizam, Senior Vice Chairman of P@SHA, praised exporters for doing “a tremendous job in enhancing the export income of the IT industry” and highlighted their role in stabilizing the current account. He urged the government to maintain supportive policies.
  • Ibrahim Amin, Chairman of PAFLA, pointed out that ongoing training and capacity-building initiatives are enabling more freelancers to enter global digital workspaces.
  • Noman Ahmed, an IT exporter, argued that to reach the US$5B target, export receipts must achieve US$400-450 million per month. He noted that while AI tools bring efficiency, they also bring challenges. He emphasized the need for joint ventures and long-term regulatory frameworks.

What Needs to Happen: Strategic Roadmap

To not just sustain but accelerate growth, the following measures are essential:

  • Long-Term Policy Frameworks: Consistent, forward-looking incentives such as tax relief, export facilitation, and stable regulatory regimes.
  • Skill Ecosystem Strengthening: Investments in education, R&D, and training centres focusing on high-value domains like AI, data science, and cybersecurity.
  • Digital & Physical Infrastructure Enhancements: Improved internet connectivity, stable electricity supply, and wider spread of tech clusters across the country.
  • Support for Freelancers & SMEs: Easier access to finance, smoother foreign payments, and mentorship opportunities for small exporters.
  • Leveraging Emerging Tech & New Markets: Move into higher-value IT services and explore less saturated markets in Asia, Africa, and Latin America.
  • Public-Private Collaboration: Continuous dialogue and co-designed programmes between exporters, government agencies, and financial institutions.

Outlook: Can Pakistan Reach the US$5 Billion Mark?

Reaching US$5 billion in IT exports for FY26 is ambitious but achievable, provided monthly receipts climb to the US$400-450 million range. Success will hinge on policy consistency, infrastructure improvements, and capturing high-value contracts.

If momentum is maintained and structural challenges addressed, the IT sector could not only meet targets but also redefine Pakistan’s global image as a digital services hub.


Conclusion

Pakistan’s IT export performance in July-August FY 26 is a bright signal of resilience and opportunity. Beyond the numbers, this growth represents Pakistan’s integration into global digital value chains and the potential for long-term economic diversification.

The journey ahead will require sustained investment, collaboration, and innovation. If managed well, the IT sector could emerge as one of Pakistan’s strongest engines of economic stability and global competitiveness.

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