Pakistan’s information technology (IT) industry marked a historic milestone in March 2024 when it reported its highest-ever monthly exports of IT. As per the security data from Topline, the monthly IT exports amounted to US $306 million, indicating a growth of 37 percent YoY and 19 percent MoM. This exceeded US $303 million in December 2023, the previous high for exports.
Retention limit relaxation:
In the Exporters’ Specialised Foreign Currency Accounts, the State Bank of Pakistan (SBP) raised the allowable holding ceiling from 35% to 50%. This incentivized IT companies to repatriate their overseas earnings and allocate them to local accounts.
Stability of PKR Currency:
The Pakistani Rupee’s (PKR) currency stability encouraged IT companies even more to transfer their outside profits.
Pakistan’s overall IT exports in the first nine months of the 2024 fiscal year (9MFY24) were US $2.28 billion, a 17 percent YoY growth over the same time the previous fiscal year. Furthermore, net IT exports (exports less imports) increased in March 2024 to reach US $275 million, up 20% month over month and 37% year over year. These net export figures were higher than the US $208 million 12-month average.
Muhammad Aurangzeb, the recently appointed Finance Minister, voiced hope, predicting that IT exports will likely surpass US $3.5 billion by year’s end. Experts predict that gross IT exports for FY24, however, will probably be closer to US $3.0 billion than US $2.6 billion from the previous year.
The IT sector in Pakistan is experiencing exciting times, and its growth trajectory is encouraging!
To encourage the expansion of IT exports, the Pakistani government has put in place a number of initiatives. The following are some important projects:
- Projects for Export Promotion:
In order to market Pakistan’s IT services internationally, the government works with industry players. This involves attending conferences, exhibitions, and international trade shows.
Read more: Pakistan Eyes $10 Billion With First-Ever It Export Strategy
The purpose of trade delegations is to exhibit Pakistani IT capabilities, discover new markets, and build business relationships.
- Tax breaks and incentives:
The government encourages IT companies to invest in export-oriented projects and research and development (R&D) by providing tax benefits.
IT businesses can take use of several benefits such as tax breaks and other amenities by establishing special economic zones (SEZs).
- Programmes for the Development of Skills:
The government prioritises developing the workforce’s IT capabilities. To increase technical proficiency, a range of workshops, certificates, and training courses are offered.
Working together with academic institutions guarantees that graduates are qualified for IT jobs.
- Development of Infrastructure:
The government makes investments to upgrade digital infrastructure, which includes cloud services, data centres, and high-speed internet access.
The IT sector is indirectly supported by improvements to the physical infrastructure, such as the roads, electricity, etc.
- Getting Business Done Easy:
IT enterprises find it easier to operate with streamlined procedures for export documentation, clearances, and company registration.
The administration wants to lower bureaucratic barriers and foster an atmosphere that is conducive to business.
Maintaining growth necessitates a comprehensive strategy that includes both public and private sector efforts. The IT sector in Pakistan is still growing, and these encouraging policies are essential to its success!