[vc_row][vc_column][vc_column_text dp_text_size=”size-4″]Pakistan’s IT exports have increased dramatically in recent years, topping $2.6 billion in the previous fiscal year. Nonetheless, its proportion of the worldwide IT export market is less than 1%, significantly below its potential.
According to a State Bank of Pakistan (SBP) report, Pakistan’s proportion of global computer services exports remains small, increasing from 0.17 percent in 2017 to barely 0.3 percent in 2021.
In terms of export diversification, overall IT exports are concentrated in a few regions, with the United States accounting for more than 55 percent of total IT exports between FY13 and FY22. Pakistan’s exports climbed somewhat towards the end of the previous fiscal year, from 10% to 12% in the top five destinations of the UK, UAE, Singapore, Canada, and Ireland.
However, a review of Pakistan’s export markets and firm-level exports indicate significant space for improvement in terms of global commerce, according to a study issued by the SBP in its semi-annual report “The State of Pakistan’s Economy.”
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There are several reasons for export market concentration. Small IT enterprises lack the resources to investigate overseas markets, particularly non-traditional markets (those with which Pakistan does not have significant commercial or historical relations). According to firm-level data, 80 percent of enterprises export less than $0.1 million per year, and more than 90 percent export less than $0.5 million.
Pakistan’s IT exports have grown significantly in recent years, with a CAGR of 24.4 percent between FY17 and FY22.
IT exports increased to $2.1 billion in FY22, up from $0.89 billion in FY19 and $0.29 billion in FY13, boosted by software and software-related exports. As a result, IT exports are rapidly becoming one of the economy’s main foreign exchange earners.
Because the country’s hardware industry is not as developed as the software industry, Pakistan mostly trades in software and software-related exports. Other Computer Services’ official statistics now include freelancing export proceeds ($265 million in FY22). Finally, an extra $1.5 billion in IT (including software and software consultancy) and IT-enabled exports were expected to be in the grey market in 2019, which may have increased to $2.5 billion by FY22, according to current industry projections.
In terms of export classification, IT is part of Pakistan’s wider ICT sector, which had a total value of $269 million in FY06. It took more than ten years for ICT exports to surpass $1 billion in FY18. However, the rate of growth has accelerated dramatically since then, with ICT exports expected to exceed $2 billion by FY21 and $2.5 billion by FY22.
ICT raised its proportion of overall service exports from 7.2 percent in FY06 to 37.7 percent in FY22, making it the greatest contributor to service exports. The growth is primarily driven by Computer Services (IT exports), which accounted for 80.5 percent (or $2.1 billion) of Pakistan’s ICT services exports in FY22, with the remainder coming from the Telecommunication Services category (including Call Centres) and a negligible share from the Information Services segment.[/vc_column_text][/vc_column][/vc_row]
