Local companies and startups related to IT and similar sectors have continued to expand their market share in the foreign market as the value of exports recorded double digit growth of 14.5 percent in the first quarter of fiscal year 2017-18.
According to Statistics released by the State Bank of Pakistan, the value of exports by companies under ICT and related sectors surged to $252 million during the period of July to September 2017 against $220 million exports recorded last year.
Pakistani companies usually export ICT services to USA, Middle East and North African countries. Major heads of exports included software and hardware consultancy, telecommunication services, call center services and export of software.
In the last financial year 2016-17, IT exports and related services touched nearly $1 billion reaching an all-time high. It is expected that exports will cross the $1 billion mark this year.
Pakistan IT Exports Are Highest in South Asia
According to Pakistan Software Exports Board (PSEB), Pakistan’s growth rate of IT & ITES exports has been the highest in South Asia during the last three years. It grew by 71 percent from June 2013 to June 2016, whereas India’s exports grew at 40.6 percent and Sri Lanka’s at 19.9 percent during the same period.
In the last financial year as well, Pakistan’s IT and related services exports have grown at a faster pace than India and Sri Lanka. Pakistan’s growth rate during the FY 2016-17 was 16 percent, whereas India’s growth rate was 8 percent and Sri Lanka was at 5 percent.
The statistics of IT services exports are usually labelled as remittances under the IT sector but the industry strongly believes that overall exports are three times higher than the reported numbers which includes exports of services by freelancers and various IT services in different sectors such as financial and textile sectors.
Accordingly, the exports of IT and related services stand $756 million by the end of first quarter of 2017-18, which will likely to touch a mark of $3 billion as per estimates.
In this regard, the central bank is working to bring IT companies and service providers onboard, to realize the correct reporting of inflows by IT sector of the country. It has designed a reporting structure of inflows that will help in increasing the inflows of IT sector in future if companies follow this pattern.
There is also a need that ICT service providers avoid routing their inflows through tax-free countries and avail tax benefits given by the government of Pakistan.
The growth of exports of the services sector is quite handsome but it must be increased, keeping in view the potential of the companies. On the other hand, the government should speed up the work on planned IT parks to facilitate companies and individual service providers of the sector.