KARACHI: Pakistan’s information technology (IT) sector achieved a historic milestone in the fiscal year 2025-26, with IT and IT-enabled services (ITeS) exports reaching a record $4.6 billion, marking an impressive 21 percent increase from the previous year’s $3.81 billion. Although the sector narrowly missed the government’s $5 billion export target, the achievement reinforces Pakistan’s position as one of the country’s fastest-growing export industries and strengthens its long-term goal of reaching $10 billion in IT exports by FY2028-29. Industry experts believe the strong performance reflects the steady expansion of Pakistan’s digital economy, driven by a growing pool of skilled professionals, rising demand for remote services, improved internet infrastructure and favourable tax incentives. However, they also caution that the sector must overcome structural challenges and shift towards innovation-led growth to sustain momentum. Pakistan is home to more than 600,000 IT professionals and freelancers, alongside tens of thousands of registered software and IT-enabled services companies operating from major technology hubs in Karachi, Lahore and Islamabad. Secondary cities such as Faisalabad, Sialkot and Sukkur are also emerging as important contributors to the country’s digital workforce. Software development, business process outsourcing (BPO), enterprise technology services, call centres and freelancing remain the backbone of Pakistan’s IT exports. Meanwhile, demand for advanced services including artificial intelligence (AI), cybersecurity, cloud computing, automation and digital consulting is expanding rapidly as global businesses seek specialised technology solutions. The United States continues to be Pakistan’s largest export destination for IT services, followed by the United Kingdom, the Gulf region, Europe, Canada and several Asian markets. Experts say significant opportunities remain untapped in Saudi Arabia, the UAE, Qatar, Germany, Japan, South Korea, Australia, Africa and Central Asia, particularly in high-value technology sectors. Industry leaders stress that Pakistan must diversify both its export markets and service offerings. They argue that relying mainly on traditional software development and low-cost outsourcing will limit future growth, while greater investment in AI-powered solutions, enterprise software, cybersecurity and digital transformation services can significantly increase export earnings. Freelancers have also emerged as a major force in Pakistan’s digital economy, contributing an estimated $1.1 billion, or roughly a quarter of total IT exports, during FY2025-26. Online platforms have enabled thousands of professionals to access global clients, creating new employment opportunities and boosting foreign exchange inflows. Beyond export revenues, the sector continues to generate employment, with thousands of technical positions available across the country. The expansion of remote work has also increased opportunities for women and professionals living outside major urban centres. Experts believe the next phase of growth depends on moving beyond providing outsourced services to creating globally competitive technology products and intellectual property. They argue that Pakistan must position itself as a producer of innovation rather than simply a destination for low-cost software development. The country’s AI ambitions are also gaining momentum. Under the National AI Policy 2025, Pakistan plans to establish AI centres of excellence, launch dedicated funding programmes, expand public-sector AI adoption and train around one million people in AI-related skills by 2030. New AI hubs are also being developed to support startups and accelerate innovation. International partnerships are expected to play a key role in this transformation. Pakistan has strengthened technology cooperation with China through joint AI and IT initiatives and recently became a founding member of the World Artificial Intelligence Cooperation Organisation (WAICO). At the same time, interest from the United States has grown, with American investors pledging more than $20 million for Pakistan’s technology sector during a recent investment conference. Connectivity has also improved through expanded submarine cable capacity, cross-border fibre links and stronger cloud infrastructure, making it easier for local companies to deliver digital services worldwide. Despite the progress, industry stakeholders warn that policy uncertainty, foreign exchange restrictions, internet disruptions, energy costs, weak intellectual property protection and limited access to global payment systems continue to hinder faster growth. They believe addressing these challenges while promoting innovation and AI-driven technologies will be essential if Pakistan hopes to transform its record-breaking IT industry into a global technology powerhouse.
