Pakistan’s IT and IT-enabled services sector recorded $2.97 billion in export inflows during July to February FY2026, marking a 19.6% year-on-year increase. However, a steady drop in monthly receipts over the past two months has tempered expectations around the government’s $5 billion annual target.

IT Exports Hit $2.97 Billion in July to February FY2026

According to data from the State Bank of Pakistan (SBP), Pakistan’s ICT export earnings grew by 19.78% year-on-year, reaching $2.61 billion in the first seven months of the current fiscal year ending June 2026, up from $2.18 billion during the same period last year. Cumulative inflows reached $2.97 billion by the end of February 2026, compared with $2.48 billion in the same period of FY2025.

IT exports now account for over 10.8% of Pakistan’s total exports. This is considered a historic milestone, reflecting the country’s gradual economic shift from traditional goods like textiles and rice toward high-value digital services.

Monthly Receipts Show a Two-Month Decline

Despite the cumulative growth, monthly figures reveal a softening trend. The sector peaked at $437 million in December 2025, before declining to $374 million in January 2026 and $365 million in February 2026, a drop of over 16% in just two months.

Analysts project exports to grow 18 to 20% in FY2026, which could bring the total to around $4.5 billion. This figure still falls short of the ambitious $5 billion target set under the government’s national economic plan, Uraan Pakistan. At the current monthly run rate of approximately $365 million, full-year IT exports are likely to plateau around $4.4 to $4.5 billion.

Geopolitical and Regional Pressures Add Uncertainty

The slowdown in monthly inflows is partly attributed to broader global uncertainty. Ongoing regional tensions have prompted clients, particularly across the US and GCC markets, to delay digital transformation and expansion projects. This has reduced near-term order flow for Pakistani IT firms.

The growing tendency of international companies to outsource software development, cybersecurity, and digital transformation projects has boosted Pakistan’s profile as an affordable IT services provider. Even so, regional instability continues to introduce uncertainty into forward planning for many of these engagements.

Beyond export figures, Pakistan’s broader startup ecosystem reflects a market in a phase of cautious maturation, with genuine momentum tempered by structural funding constraints.

Ecosystem Value Surpasses $4 Billion

Pakistan’s venture capital-backed startups have surpassed a combined enterprise value of $4 billion, up 3.6 times since 2020, according to the January 2026 Pakistan Tech Report by Dealroom.co and inDrive. The growth rate outpaces larger ecosystems including India, New York, Paris, and Dubai, placing Pakistan among emerging “New Frontier” tech markets.

The country now hosts over 170 VC-backed startups, with roughly 17 “breakouts” that have raised between $15 million and $100 million, two scale-ups that have crossed $100 million in funding, and 13 “Colts” generating between $25 million and $100 million in annual revenue.

According to TechList Pakistan, which tracks startup funding activity across the country, deal flow in early-stage rounds, particularly pre-seed and seed, has remained consistent through Q1 2026. Fintech, healthtech, and B2B SaaS have emerged as the three most active verticals during this period.

Startup Funding Rebounds in 2025

Pakistani startups secured over $74.23 million in equity and hybrid financing in 2025, spanning pre-seed, seed, and Series A rounds across fintech, mobility, healthtech, and other sectors. According to Data Darbar, local startups raised about $36.6 million in equity across 10 disclosed rounds, a modest increase from $22.5 million the previous year, though deal volume slipped slightly from 15 to 14 transactions.

Fintech and Healthtech Lead Investment Activity

The fintech sector continues to dominate investment activity, with startups such as Haball and Metric securing sizeable Pre-Series A and seed funding rounds. Analysts say fintech’s appeal lies in its ability to integrate with banking infrastructure, simplify payments, and tap into an underserved market of SMEs and digital consumers.

Haball secured a $52 million Pre-Series A funding round led by Zayn VC and backed by Meezan Bank. The company has scaled its platform to handle over $3 billion in payments, disbursing more than $110 million in financing while supporting thousands of SMEs and multinational clients.

Healthtech is emerging as the second major growth engine. MedIQ’s $6 million Series A and Xylexa’s $1 million seed round highlight strong investor appetite for solutions that address healthcare accessibility, a critical need in a country of over 240 million people.

No Unicorns Yet: The Capital Gap Remains

Despite the momentum, no Pakistani startup has yet reached unicorn status or surpassed $100 million in annual revenue. Limited domestic capital is widely identified as the primary bottleneck holding the ecosystem back from the next level of scale.
Globally, venture capital investment reached $512.6 billion in 2025, up 30.8% from 2024, with artificial intelligence alone accounting for $270.2 billion. For Pakistan, these global trends highlight the structural challenge of competing in capital-intensive sectors like AI without matching infrastructure or investment scale.

Female-Founded Startups Gain Ground

One of 2025’s notable trends is the rise of female-led startups, which raised $8.8 million in disclosed equity, accounting for more than 24% of total funding. Startups including Shadiyana, BusCaro, Metric, MedIQ, and Lean Outset were among the female-founded or co-founded ventures contributing to this shift. TechList Pakistan has closely documented this trend through its founder coverage and funding trackers.

Policy Reforms Supporting Export Growth

The State Bank of Pakistan raised the permissible retention limit in Exporters’ Specialised Foreign Currency Accounts (ESFCA) from 35% to 50%. This allows IT exporters to retain a larger share of their dollar earnings, a reform that has provided greater liquidity for companies reinvesting in global operations.

Pakistan’s 5G spectrum auction, conducted in March 2026, is expected to unlock new product categories in healthtech, edtech, IoT, and industrial automation that have remained structurally inaccessible on existing infrastructure. Building quality talent, empowering grassroots entrepreneurship, and accelerating local AI adoption are identified as the three pillars needed to position Pakistan as a competitive global IT export hub.

Long-Term Target: $10 Billion by 2029

National long-term targets foresee $10 billion in annual IT exports by 2029, a goal that requires a significant acceleration from the current growth trajectory. IT exports now constitute over 40% of Pakistan’s total services exports, supporting foreign exchange stability, high-value employment, and entrepreneurship. This cements the sector as a core pillar of Pakistan’s broader economic strategy.

Closing the gap between the current pace and the $5 billion FY2026 target will require reversing the recent monthly decline, broadening client geographies beyond the US and Gulf, and continuing to scale startups into globally competitive businesses. The structural groundwork is being laid, but sustained execution remains the sector’s defining test going forward.

Sources: State Bank of Pakistan (SBP), Ministry of Information Technology and Telecommunication, Data Darbar, Dealroom.co / inDrive Pakistan Tech Report (January 2026), Topline Research, Pakistan Software Houses Association (P@SHA), TechList Pakistan.

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Pakistan’s Information Technology (IT) sector has started the new fiscal year on a strong note, recording all-time high exports of $354 million in July 2025. This marks a 24% increase compared to the same month last year and a 5% rise from June 2025, according to the latest data.

The figure is also well above the 12-month average of $317 million, showing how rapidly the country’s IT industry is growing.

Breakdown of Growth

According to analysts, the main boost came from computer services, which grew by 10% month-on-month, reaching $311 million. Within this category, software consultancy services stood out, climbing to $104 million in July compared to $96 million in June.

This growth highlights how Pakistani IT companies are increasingly serving global clients with software solutions, consultancy, and digital transformation services.

Key Factors Behind the Rise

Experts say several positive steps and conditions have helped the industry achieve this record:

1. Global Expansion of IT Companies – Pakistani IT firms have been actively expanding their client base, particularly in the Gulf Cooperation Council (GCC) region, which has created new opportunities.

2. Policy Support by the State Bank of Pakistan (SBP) –

   • The SBP increased the permissible retention limit in Exporters’ Specialized Foreign Currency Accounts from 35% to 50%.

   • Exporters can now use these accounts for equity investment abroad, giving them more flexibility to expand globally.

   • The stability of the Pakistani rupee has also encouraged IT companies to bring a larger share of their foreign earnings back home.

3. Confidence through the EIA Scheme –
   The Equity Investment Abroad (EIA) scheme, introduced by the SBP, allows IT exporters to use up to 50% of their foreign earnings for acquiring equity stakes in international ventures. This has boosted confidence among companies to remit more export proceeds to Pakistan.

A survey by the Pakistan Software Houses Association (P@SHA) further revealed that 62% of IT companies maintain specialized foreign currency accounts, showing strong adoption of these supportive measures.

Net IT Exports Also Rise

Net IT exports — which calculate total exports minus imports — reached $317 million in July, showing a 26% year-on-year increase and a 4% month-on-month rise.

Why This Matters

The record growth in IT exports is a promising sign for Pakistan’s economy. The IT sector is not only bringing in valuable foreign exchange but also creating jobs and strengthening the country’s image as a digital services hub.

If the momentum continues, Pakistan’s IT industry could play a central role in stabilizing the economy and expanding global trade presence.

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ISLAMABAD: In a candid admission on the floor of the National Assembly, Minister of State for Information Technology and Telecommunication, Shaza Fatima Khawaja, revealed on Friday that no investment has been made in Pakistan’s telecom infrastructure over the past three years. The minister attributed the stagnation to the financial turmoil inherited from the previous government, which left the country on the brink of economic collapse.

Internet and VPNs Functional, Says IT Minister

During the Question Hour, the minister addressed concerns raised by PPP lawmaker Shazia Marri regarding sluggish internet speeds and the suspension of VPNs, which have disrupted access to apps like WhatsApp. Khawaja assured the house that internet services, including VPNs and WhatsApp, were fully operational. She urged Ms. Marri to provide specific examples of malfunctioning VPNs or industries facing issues, emphasizing that industries relying on fixed-line connections had not reported significant problems.

Blame on the Previous Government

Responding to criticism, the minister laid the blame for the telecom sector’s lack of growth squarely on the previous PTI government. She stated that the country’s inability to import critical telecom equipment due to frozen letters of credit and fears of default had severely hindered infrastructure development.

“Telecom infrastructure is entirely import-based. When the PTI government left in 2022, no one was willing to open letters of credit due to the looming threat of default,” Khawaja explained.

She also noted the absence of foreign direct investment (FDI) in the sector over the same period.

Hopes for Economic Recovery and FDI

Highlighting recent improvements in Pakistan’s macroeconomic indicators, Khawaja expressed optimism that stable currency rates, lower inflation, and reduced interest rates would attract foreign investment. “With these positive changes, we expect FDI to flow into the telecom sector, enabling us to improve internet availability and infrastructure,” she said.

Progress and Challenges in Connectivity

The minister outlined several developments to improve connectivity. Pakistan currently has seven submarine cables, although one has reached the end of its lifespan. The Africa-2 cable has landed in the country and is expected to become operational within months, boosting internet capacity. Additionally, the Pakistan-China optic-fiber cable has been operationalized, and plans are underway to connect submarine cables to Central Asian states via the Wakhan corridor.

Despite these advancements, Khawaja acknowledged congestion in internet services, citing a lack of investment, limited spectrum, and submarine cable capacity constraints.

IT Export Growth

Khawaja also pointed to a 28% increase in Pakistan’s IT services export remittances, which reached $1.86 billion in the first half of the current financial year. This, she claimed, demonstrated improvements in internet speed and usage.

Opposition Protest Halts Proceedings

Meanwhile, the National Assembly session was marred by persistent protests from PTI members for the fifth consecutive day. Opposition lawmakers disrupted proceedings by raising slogans, thumping desks, and pointing out a lack of quorum. Speaker Ayaz Sadiq, visibly frustrated, adjourned the session until Monday evening after failing to complete even the Question Hour.

The ongoing political turmoil, coupled with the challenges in the telecom sector, underscores the urgent need for sustained investment and policy reforms to address Pakistan’s digital infrastructure woes.

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On Monday, May 30th, 2022, a ceremony was held at Lahore University of Management Sciences (LUMS) to support innovative entrepreneurs. LUMS Vice-Chancellor, Dr. Arshad Ahmad, Ignite CEO, Asim Shahryar Husain, NITB Executive Director, and Board of Ignite Chairman, Syed Husnain Abbas Kazmi, were among those present on this auspicious occasion. They all urged the entrepreneurs to keep on innovating and assured them of their complete support.

Syed Amin-ul-Haque, the Federal Minister for Information Technology and Telecommunications, was the special guest, and he disclosed that Pakistan’s IT exports will top $3 billion this year.

Due to the advantageous climate provided by the sector, Pakistan’s IT exports had surpassed $2.1 billion the previous year. The government is on a mission to help Pakistan’s entrepreneurship environment grow. It has also established a tax-free market for IT startups and exports to achieve this.

Through Ignite, the IT ministry also provides local and global networking platforms. The national technology fund is part of the setup, and it is known for sponsoring excellent startups. As a result of these initiatives, start-up investments have increased fivefold since 2020.

In Islamabad, Lahore, Peshawar, Karachi, and Quetta, national incubation centres have been built. The government has opened two new incubation centres in Faisalabad and Hyderabad to tap new markets and explore the potential of Punjab and Sindh.

All of these incubation facilities are doing an excellent job of assisting start-ups in pitching their ideas and products to potential clients. They also help pupils who have unique and innovative creative ideas. All of these steps would help Pakistan attract investment.

Finally, three promising firms were rewarded at a prize distribution ceremony. Peervest Global, a digital crowdfunding platform that connects investors with tech-enabled entrepreneurs, won the third prize. The second prize went to Dawa Asaan, which provides citizens with a smart pharmacy.

Medicines for chronic conditions are pre-sorted and pre-packaged, and they are sent on a monthly basis. The first prize was given to QBio, a life science business that plans to start an enzyme biotechnology company. These are promising businesses that were chosen for investment. The government is doing everything it can to encourage and support entrepreneurs to create their own businesses in Pakistan.

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From July 2021 to April 2022, IT export remittances, which include telephones, computers, and information services, reached an all-time high of $2.198 billion, up 29 percent from $1.7 billion in fiscal 2020-21.

ICT export remittances climbed by 29% to US$249 million in April 2022, according to State Bank of Pakistan data, from US$193 million in April 2021 and US$260 million in March 2022.

Pakistani Prime Minister Shehbaz Sharif stated that the technology sector offers tremendous prospects for investment, and that the government plans to grow IT exports from US$1.5 billion to US$15 billion in the coming years.

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From July to March FY22, remittances from IT exports, which include telecommunication, computer, and information services, increased by 29.26% to $1.94 billion, up from $1.50 billion in the previous fiscal year.

IT export remittances reached $259 million in March 2022, up 23.92 percent from $209 million in March 2021, according to data from the Ministry of Information Technology and Tele­communication.

IT exports in March 2022 were also $58 million greater than remittances received in February 2022, which reached $201 million. The net exports connected to the IT industry exclusively, excluding additional services like as call centres, were $1.47 billion in the first nine months of this fiscal year, accounting for 75.56 percent of the overall $1.94 billion in ICT exports.

In comparison to FY21, net IT-only exports increased in the current fiscal year. Last year, net exports were $1.12 billion, accounting for 74.72 percent of the $1.50 billion in export proceeds. However, given current political uncertainties, it is less probable that the country will meet its Rs3.5 billion objective from IT export remittances.

Following the release of the numbers, Syed Aminul Haq, the federal minister for information technology and telecommunications, instructed the Pakistan Software Export Board (PSEB) to go above and beyond to meet the IT export target.

Meanwhile, the minister told  that all aspects of information technology must be advanced, and the youth, particularly students, must be connected to the digital world.

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Pakistan Software Export Board has recently projected Country’s Information Technology exports to boost from $2.8 Billion to $5 Billion by 2020 and to $10 Billion by 2025.

Managing Director PSEB Asim Shahryar Hussain briefed the National Assembly Standing Committee stating that IT Exports had mounted up a whopping $2.84 Billion by 2017 and would mount further to $5 Billion by 2020. The Exports through Freelancers were said to be $200 Million for the year while IT export were projected at $661 Million for the year 2017.

The Committee Member astonished, questioned the way such target was to be achieved but Official had no answers. What fascinated even more was that the projected export was far away from the trends. During the last 20 years it had just accounted $2.8 Billion and here was Pakistan Software Export Board Managing Director claiming it to double up in the next 4 years!

The Committee headed by Captain Muhammad Safdar commenced on Tuesday. The committee expressed exasperation over the IT export being less than par. The officials confirmed that Pakistan was far behind in the IT exports from the neighboring countries, excusing Pakistan’s negative Reputation as the cause of it.

Lack of capacity building, Ignorance of commercial councilors at abroad, Lack of quality Software and Standard Certification system were declared to be some other causes.

The official further declared Pakistan’s IT exports to be $2.8 billion against State Bank’s figures of $561 Million citing unregulated sector and the lack of heed paid by the companies to get registered with Pakistan Software Export Board as the reasons. The officials also said the Executive Committee of National Economic Council (ECNEC) had approved the country’s first state-of-the-art Information Technology (IT) Park in Islamabad.

The committee also directed the Ministry of Information Technology and Telecommunication to acquire performance report of the commercial counselors employed in Pakistani embassies abroad for the last two years pertaining to IT sector. The committee also decided to raise the issue with commerce minister and suggested IT training for officers before their postings abroad.

Korean Exim Bank recently agreed to finance the development of first technology Park in Pakistan in order to promote IT and telecom sector labeled at $50 Million. The Loan Agreement is predicted to be signed by the end of January 2017 and consequently the development of IT Parks would start soon. IT parks are to be developed in Lahore, Karachi and probably Faisalabad and Sialkot too.

The committee noted that Pakistan had immense IT talent and potential, but that potential had not been utilized fully on a global scale because of lack of proper infrastructure for the IT industry at present.

The committee was further informed that Axact Company was registered with the Pakistan Software Export Board; however, after the case, its membership was suspended. Officials quoted that company remittances were $24 million. On which the committee member said it meant a lot of money was parked outside the country.

According to the stats that were provided to the committee said that the growth in  PSEB- registered IT companies and call centers was 81.8%. With an increase from 681 in 2013 to 1,238 in 2016 and projected to reach 1,330 in 2017 in last three years.

What is to be noted is whether the ‘Root-Less” Plans would lead to something or would end up as unsung, unfeasible Proposals? What do you think? Leave your reply in comments section.

News Source: Brecorder.com

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