Pakistan’s IT exports are rising. Why is this, and how can it continue to grow?

Recently, it was reported that December 2025 recorded the highest-ever monthly value of IT exports for Pakistan. In a report by Topline Research, it was stated that this figure amounted to $437 million, which was a 22.7% increase over the amount in November 2025. Compared to December 2024, the value represented a 25% increase. At the same time, according to the report, IT exports during the first half of FY26 totalled Usd 2.2 billion, a 20 percent increase over the corresponding period in the previous year.

There is an obvious trend, then. Pakistan’s IT exports are growing.

Headed mostly towards the Gulf region, these exports ordinarily involve the export of computer software, BPO services such as call centre services, IT consultancy services for both software and hardware, information services, and maintenance and repair services for computers.

The reasons behind this surge, however, are some government incentives, particularly the reduction in the allowable permissible retention limit in Exporters’ Specialised Foreign Currency Accounts, as well as allowing exporters to use part of that money to make foreign investments. At the same time, the expanding global footprint of major IT exporters has also contributed to this increase, and so has the rise in IT literacy and the increased accessibility of the internet and internet-compatible devices to the population.

But the government is looking for steep upsides. According to the reports, under the “Uraan Pakistan” plan, the target for IT exports by 2028-29 has been set to Usd 10 billion. Given that estimates for exports this year range from Usd 4 to 5 billion, it is hard to envision such a rapid growth in a mere 3 years. Regardless of whether the aim is achieved or not, perhaps what is more important is the government-led and -encouraged development on local IT infrastructure. Part of this is happening, but perhaps more is needed – not only different in quantity, but also in kind – to really give the industry a push. 

The Reasons for Increasing IT Exports:

According to the report, one of the main reasons why IT exports are rising is that the State Bank of Pakistan had relaxed the maximum retention limit in Exporters’ Specialised Foreign Currency Accounts (ESFCAs) from 35% to 50%. The measure was instituted through a notification by the Exchange Policy Department of the State Bank, dated 23 October 2023. Its stated aim was, in fact, to “encourage the exporters of Software, Information Technology (IT) and IT-enabled Services (ITeS) and freelance services” in order to “boost their export earnings and bring additional foreign exchange into the country”.

Now, these accounts are essentially accounts in which IT exporters (including freelancers) can deposit a portion of their export proceeds to not only hedge against currency fluctuations, but also to cover business expenses. These expenses could include, for example, imports, acquisition of services from abroad, profit/dividend repatriation against registered shares, etc. And these expenses could then be made without the need for the State Bank’s approval.

One type of such expenses is the use of EFSCA funds in order to engage in capital and equity transactions, such as equity investment abroad and foreign currency loan repayments, although appropriate procedure must be followed if these are being repatriated. The ability to prosecute this provision is also supported by the State Bank’s updated guidelines, which it published in 2024. These rules streamlined the process of acquiring stakes in foreign entities and granted permission to IT sector companies to expand their footprint abroad and create subsidiary or branch offices abroad.

These measures, obviously, are intended to encourage IT companies to access global markets and to enable them to use their earnings from those transactions to further their international presence. The end result can be envisioned, where increased international penetration leads to greater exports – a model that could be sustainable – and ultimately helps reduce the country’s trade deficit.

Then, there are major IT companies like Systems Limited, which have been expanding their footprint abroad. Systems, which is a Rs231 billion company, and brought in annual revenues of Pkr 38.5 billion in 2024, made 87% of its total earnings as part of exports.

In fact, according to their annual report 2025, the major market was the Middle East, Africa & Others region, which accounted for 59% of the total revenue. 21 percent came from North America, 13% from Pakistan, and 4% and 3% came from Europe and the Asia Pacific, respectively.

Moreover, the company is aiming to increase the share of export-led revenue. It is already planning to establish its own subsidiary in the United Kingdom. At the same time, it is growing its footprint in the Middle East, focusing on the acquisition of enterprise clients and offering specialised supply centre capabilities. Systems Limited has also ventured in the Business Process Outsourcing (BPO) space, whereby it offers cost-effective shared services in accounting, HR, and legal functions.

The success of companies like these – such as Contour Software, ibex, Strategic Systems, etc. – is surely a major driver of the increase in Pakistan’s exports. They have – and are building more – capacity to take up any facilitations the government has to offer.

And then there are the freelancers. Encouraged by the access to cheaper internet services (though sometimes with aberrant availability), cheaper compatible devices, and a more accessible IT education, IT-whizzes have been building up their profiles on freelancing platforms, and looping in foreign clients for a host of different IT services. In FY 2024, freelancers brought in a total of $400 million. Their contribution by the end of the current financial year is expected to cross $0.8 to $1 billion. Not bad.

Will IT be the “IT” sector?

Currently, the IT sector’s contribution to the export of total services from Pakistan represents around 45% of the total Rs2.3 trillion. The IT sector is the main driver in this case, and it is no wonder that the government is keen to present it as one of the key drivers of the push towards economic ability. In fact, it has been reported that the government is targeting to achieve $10 billion in IT exports by 2028-29, under the ‘Uraan Pakistan’ national economic plan.

That, in such a short time, is ambitious, to put it mildly. This is especially the case if we consider that currently the country is welcoming reaching the IT export value of $2.2 billion in the first six months of the current fiscal year.

The signs are encouraging, no doubt, and there is, of course, an upward trend. But the fact is, there are some constraints on the growth that can be relieved by the government’s investment in more long-term capability building.

Let’s take Systems Limited as an example, and its geographical spread of exports. The European market is a mere 4 percent, while APAC stands at 3 percent. These are also massive and lucrative markets, which have been little explored. In order to better enter these markets, a government-led, and private-driven partnership that is dedicated to the upskilling on the local talent, especially in terms of automation, smart systems, and AI-related infrastructure, is needed, which is likely to help Pakistan access a greater share in these markets, as well as increase its share in the Middle East and North American economies.

At the same time, government-led partnerships – especially with advanced IT economies – aiming not only to develop and encourage the local tech ecosystem, but also to facilitate their export-readiness seems also a step that would help usher Pakistan’s IT exports to the next level.

Currently, the IT exports sector is dominated by Systems Limited, but not every IT company is as big. And the economies of scale accessible to Systems Limited might not be what’s available to most of the sector. There is, therefore, a great need for government encouragement of smaller companies, and it can do so by, for example giving incentives for infrastructure build-up, facilitating partnerships with bigger companies in the region, and equipping companies for higher-value exports.

For instance, in terms of computing and processing hardware manufacturing, Pakistan too lacks behind. Though capitalising on such initiatives would likely take years, it might also be a pertinent way of bringing Pakistan’s exports to the next level. Initially, for example, such initiatives could be developed with international technology partners – from China, for instance – and these enterprises could gradually lead to local adoption and assembly.