Pakistan’s IT sector recorded its highest monthly export record in December 2024, with exports worth $348 million. This is 15 percent higher than the same period last year and 12 percent higher than the previous month.
According to Topline Securities, total IT exports in the first half of fiscal year 2025 were $1.86 billion, up 28 percent from the same period last year.
Despite this remarkable progress, concerns have arisen over slow internet and government crackdowns on VPN usage. Since last year, the federal government has been implementing a national firewall, which aims to block harmful content and prevent cyberattacks.
In particular, the government’s crackdown on unregistered VPNs has created problems for businesses and freelancers. A deadline for VPN registration was set for November 2024, but it was later canceled and no new date has been announced.
There are several important reasons behind this increase in IT exports. These include expanding the global client base of Pakistani IT companies, especially in the GCC region, and easing the foreign exchange account limits. These steps have encouraged IT exporters to bring more profits home.
The Central Bank of Pakistan has also introduced a new category that allows IT companies to invest up to 50 percent of their foreign exchange earnings in equity abroad, further boosting confidence in the sector.
However, there are concerns about the long-term impact of slow internet speeds and the effectiveness of the national firewall. The Pakistan Business Council (PBC) recently warned that slow internet speeds and the firewall could force multinational companies to relocate their operations, some of which have already been removed.
The Pakistan Software Houses Association (PASHA) said that the IT sector’s operating costs could increase by $150 million a year due to these problems. Nevertheless, experts expect the IT sector to continue growing and predict a 10-15 percent increase in exports in fiscal year 2025. This growth could meet the export target of $3.5 to $3.7 billion.
The government’s ‘Udan Pakistan’ economic plan has set an ambitious target of reaching $10 billion in IT exports by fiscal year 2029. Achieving this target will require a compound annual growth rate (CAGR) of 28 percent per year.
