Pakistan’s technology sector has reached a major milestone, with export earnings crossing the $4 billion mark for the first time in the first eleven months of the current fiscal year. The growth highlights the sector’s expanding role in supporting the country’s economy and foreign exchange reserves.
According to data released on Wednesday by the State Bank of Pakistan, exports of information technology and IT-enabled services stood at $4.184 billion during July to May FY2025-26, compared with $3.475 billion in the same period last year. This reflects an increase of 20 percent, or $709 million.
The figures include earnings from software firms, IT service providers and freelancers, many of whom continue to work for global clients across North America, Europe and the Gulf region.
Monthly inflows showed some variation. IT export receipts fell to $373 million in May 2026 from $423 million in April. Even so, overall momentum remained firm as the sector continued to hold above the $4 billion threshold ahead of the fiscal year close.
With one month left in the current fiscal year, total exports are now expected to move closer to $4.5 billion. However, the industry may still fall short of the government’s $5 billion target.
Policy support and digital push
Industry observers say the sustained growth is being supported by policy measures aimed at strengthening the technology ecosystem. Tax incentives, improved access to international payment channels and efforts to attract foreign investment have all contributed to stronger inflows.
The federal budget also introduced further relief for exporters. One key measure was the extension of the 0.25 percent final tax regime for IT exporters for the next three years, giving companies longer-term stability for planning and investment.
In addition, withholding tax on international transactions made through payment cards has been reduced from 5 percent to 0.5 percent. Business leaders say this is expected to improve cash flow and make Pakistani service providers more competitive in global markets.
Freelancers driving a growing share
The freelance economy continues to play a central role in the sector’s performance. According to the Pakistan Freelancers Association, freelancers now account for more than 20 percent of total IT export earnings, contributing over $1 billion.
The organisation notes that rising access to digital skills training and increased awareness among young professionals has led to steady growth in the freelance workforce across the country.
Industry voices believe emerging technologies, particularly artificial intelligence, could open new avenues for export growth. With demand rising for AI-related skills globally, Pakistan’s digital workforce is expected to find fresh opportunities in an evolving global tech landscape.
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