The IT and IT-enabled Services (ITeS) export remittances comprising computer services and call center services increased by around 39 percent year-on-year in January 2024 compared to $190 million in the same period last year.
According to Topline Securities, the YoY jump in exports was due to relaxation in the permissible retention limit by the State Bank of Pakistan (SBP), increasing it from 35 percent to 50 percent in the Exporters’ Specialized Foreign Currency Accounts, and stable PKR currency which encouraged IT companies to repatriate their foreign income and deposit it in local accounts.
The sector export remittances increased by around 12.7 percent during the first seven months (July-January) of the current fiscal year 2023-24 and remained at $1.720 billion compared to $1.525 billion during the same period of the last fiscal year.
The official data showed that ITeS exports’ remittances decreased by around 12.6 percent on a month-on-month (MoM) basis in January 2024 and remained at $265 million compared to $ 303 million in December 2023.
The ICT export remittances, including telecommunication, computer, and information services, stood at $2.597 billion, a negative growth rate of around one percent in the fiscal year 2022-23 compared to $2.619 billion in the fiscal year 2021-22.
The Caretaker Federal Minister for Information Technology and Telecommunications Dr Umar Saif has unveiled the first-ever IT and ITeS export strategy to increase Pakistan’s IT exports, up to $10 billion in the next three years. The country has the potential to increase its exports to $12-15 billion.
The Ministry of Information Technology and Telecommunications has identified several constraints including inconsistency in policies, taxation issues, and banking hurdles which are hampering the country’s information technology sector’s export potential of $15 billion.
Official documents revealed that over the past five years, phenomenal upward growth of 178 percent in IT & ITeS exports has been realized at a compound annual growth rate (CAGR) of 30 percent, the highest growth rate in comparison to all other local industries in services and even higher than the textile sector which stands at 148 percent.
However, a number of constraints and hurdles are hindering the growth of IT and ITeS exports. Inconsistency of policies has eroded the confidence of local and international investors, customers, and partners not to mention the trade bodies and government entities.
Frequent changes in taxation policy on IT & ITeS export proceeds are one such example.
Very nice. Expansion of IT industry is providing job opportunities to youngsters and earning valuable foreign exchange for country.
At this moment we must plan to improve the skill of youngsters inIT related matters.
Second thing is to ensure the trained IT personnel are available in abundance and there shot fall may not hurt the industry. Is their any method we can ensure that IT personnel are adequately paid and all the money is not retained by companies.
IT exports increased by 12.7%, not 39% over last year as the article itself states:
“The sector export remittances increased by around 12.7 percent during the first seven months…”
Hence, please do not lie and inflate figures. At this growth rate, forecast for IT exports is $3 billion by June this year. Need a stable govt and policies to restore confidence of foreign customers and investors. Till then, $12-15 billion a year in IT exports will be a pie in the sky.