IT Industry Records Over $600 Million in Exports During Jul-Dec FY 2019-20

Pakistan’s IT exports continued to show tremendous growth this year as it recorded a double-digit growth of 21 percent in the first half of the current financial year 2019-20.

According to the State Bank of Pakistan (SBP), exports of IT and IT-enabled services surged to $653 million from July to December 2019 as compared to $536 million recorded in the corresponding period of last year.

The industry made exports of above $100 million per month this year, which is a record for the country as various exporting countries are witnessing a slowdown in the economy. The growth in exports could also be attributed to a shift from exports of services to profitable areas including BPO and software consultancy.

Some of the emerging fields are Mobile app development, artificial intelligence, payment solutions, etc which are helping local companies win projects from foreign clients.

Pakistan’s ICT is one of three sectors with the potential to boost exports manifold as part of a global trade system called Global Value Chain (GVC), according to a report published recently by State Bank of Pakistan (SBP).

The sector, which was almost non-existent in the early 2000s, grew extensively over the last decade. This is evident from the double-digit growth in exports in segments such as software consultancy services, call centers, and other software and computer services during FY06-FY19.

The study suggested that Pakistan’s companies should enhance their share in the global market by enhancing their outsourced business.

“I strongly believe for a quick increase in export figures, ICT services are the way to go,” said Pervaiz Iftikhar, member of PM’s Task Force on IT and Telecom.

The task force has made strong recommendations to the government for abolishing duties and taxes on ICT imports, and also to sign World Trade Organization’s IT Agreement. Pervaiz adds:

We have been trying to promote the local ICT hardware industry by imposing all kinds of taxes and duties on imports of ICT goods. The local hardware industry has not shown any improvement but the users of ICT, who create services for local as well as exports, are suffering because they have to bear the brunt of those taxes and duties.

Last year, exports of IT and IT-enabled services surged to $536 million in the first half of 2018-19. The industry recorded a 2.44 percent yearly growth in the financial year to reach $1.09 billion—a record number.

Considering the growth in remittances, the contribution of IT exports is expected to reach a record level this year as well.