Pakistan's IT Exports Grew 21% in FY26, but $25 Billion Needs More

Federal Minister for Information Technology and Telecommunication Shaza Fatima Khawaja said on 28 September that Pakistan's IT exports were growing by around 20 percent annually and reiterated the government's commitment to the $25 billion IT export target set by Prime Minister Shehbaz Sharif. She made the remarks during a visit to Huawei's Global Service Center in Islamabad.

Recent State Bank of Pakistan data broadly supports the minister's description of the sector's growth. Exports under telecommunications, computer and information services reached a record $4.6 billion in FY2025-26, up about 20.6 percent from $3.814 billion in FY25. The result marked another record year for the sector, although the longer-term government targets require growth to accelerate further.

What the minister said at the Huawei centre

According to the Press Information Department and the Associated Press of Pakistan, Khawaja was received by Ethan Sun, CEO of Huawei Pakistan, Ahmed Bilal Masud, CEO of AI and Cloud at Huawei Pakistan, and senior management of the centre. She toured the facility and interacted with Pakistani engineers and technology professionals supporting international ICT operations from Islamabad.

Khawaja described the model as "exports without shipping containers", referring to Pakistani professionals delivering digital services to overseas customers while working from within the country. Huawei's Islamabad centre provides remote technical support, network operations, service assurance and other ICT services to international customers.

The minister said around 68 percent of Pakistan's population is under the age of 30 and argued that this demographic advantage needs to be converted into skilled human capital. She called for stronger cooperation among government, industry and academia to develop a sustainable technology talent pipeline.

She also referred to Huawei's commitment to train 300,000 young Pakistanis in ICT skills, an initiative developed following agreements associated with the Prime Minister's visit to China. The training programme has previously been reviewed by the government and involves skills including artificial intelligence, cybersecurity and cloud computing.

Khawaja praised Huawei's capacity-building work through its ICT Academies and encouraged the company to expand investment, knowledge transfer and mentoring in Pakistan. She also urged Huawei to explore opportunities for establishing a research and development centre in the country.

During her interaction with women engineers at the centre, the minister highlighted their contribution to the digital economy and called for greater opportunities for women in technology. Huawei Pakistan CEO Ethan Sun said the company aimed to strengthen local technical expertise and create opportunities for Pakistani professionals to participate in the global digital economy.

Where Pakistan's IT exports stand

According to State Bank of Pakistan balance-of-payments data, telecommunications, computer and information services exports reached $4.6 billion in FY26, the highest annual figure recorded for the category. That was about 21 percent higher than the $3.814 billion recorded in FY25.

The category generated almost 46 percent of Pakistan's $10.034 billion in total services exports during FY26, making it the country's largest services export category. Freelance export earnings also crossed $1 billion during the year and accounted for roughly one-quarter of IT export earnings, according to reporting based on SBP data.

Monthly receipts reached a record $437 million in December 2025. June 2026 receipts stood at $416 million, up 22.7 percent from $339 million in June 2025.

The sector has continued to grow in FY27, although the early-year pace is below the roughly 20.6 percent increase recorded for the whole of FY26. IT and IT-enabled services export receipts rose 17 percent year on year to $811 million during July and August 2026, compared with $691 million in the same period a year earlier. August receipts were $394 million, down about 6 percent from $417 million in July.

Understanding the $25 billion target

The $25 billion figure is a government target rather than a forecast based on the sector's current growth rate. In November 2024, the Ministry of Information Technology presented Prime Minister Shehbaz Sharif with an action plan aimed at substantially increasing IT and digital-sector exports over a five-year period. In the FY2025-26 budget speech, Finance Minister Muhammad Aurangzeb also described a target of increasing ICT exports to $25 billion over five years.

The target has continued to appear in subsequent government statements, including Khawaja's remarks on 28 September 2026. However, official statements over time have not always described the target's components and timeframe in exactly the same way. It is therefore safer to treat $25 billion as the government's longer-term IT and ICT export ambition rather than assign it a new five-year deadline beginning in FY26.

A clearer near-term benchmark is contained in the Uraan Pakistan framework, under which the government has set a goal of reaching $10 billion in IT exports by FY2028-29.

What happens if exports continue growing at 20 percent?

Using the FY26 figure of $4.6 billion as a starting point, a constant 20 percent annual growth rate would produce the following approximate path:

This calculation is an illustration, not an official forecast. It shows that maintaining 20 percent annual growth from the FY26 base would not be enough to reach $25 billion within the next several years. At that constant rate, exports would pass $25 billion between FY35 and FY36.

The nearer $10 billion FY29 target is also demanding. Moving from $4.6 billion in FY26 to $10 billion in FY29 would require compound annual growth of roughly 30 percent. By comparison, exports grew about 20.6 percent in FY26 and 17 percent during the first two months of FY27.

The growth rate required for the $25 billion ambition depends on the deadline used. Starting from the FY26 base, reaching $25 billion within five years would require compound annual growth of roughly 40 percent. A shorter deadline would require an even faster expansion. This illustrates the difference between the government's long-term ambition and the sector's recent growth trajectory.

Recent annual targets have been challenging

Pakistan's IT exports have grown rapidly, but recent annual targets have not always been reached. FY25 exports finished at about $3.814 billion against a government target of $4.2 billion.

For FY26, some government and industry reporting cited a $5 billion target, against which the final $4.6 billion result represented a shortfall of about $400 million. Other government briefings during the year had indicated expected exports of around $4.5 billion to $4.6 billion, which the final result achieved.

The distinction matters because different official statements used different benchmarks during the fiscal year. The underlying result is clearer: exports increased from about $2.6 billion in FY23 to $4.6 billion in FY26, while the Uraan Pakistan goal of $10 billion by FY29 would require the pace of growth to accelerate from recent levels.

What has supported the growth?

Industry reporting has linked the rise in IT exports to several factors, including a broader international client base, particularly in Gulf Cooperation Council markets, and regulatory changes introduced by the State Bank of Pakistan.

The SBP increased the amount exporters can retain in Exporters' Specialised Foreign Currency Accounts from 35 percent to 50 percent and allowed equity investment abroad through those accounts. Analysts have said these measures, together with relative stability in the rupee, encouraged exporters to bring a larger share of overseas earnings back to Pakistan.

Government policy has also included preferential tax treatment for IT exporters. Budget measures for FY2026-27 extended the 0.25 percent concessionary tax rate on qualifying IT export income through Tax Year 2029, providing greater medium-term policy certainty for exporters.

At the same time, industry representatives have identified constraints that could limit future growth. These include internet reliability, electricity supply, access to international markets, payment infrastructure, skills development and the ability of Pakistani companies to move into higher-value areas such as artificial intelligence, cybersecurity, automation and enterprise technology.

Reporting on the FY26 result cited slow internet speeds and power outages among the factors that constrained the sector during the year. P@SHA representatives have also argued that maintaining export growth will require policy consistency, easier business conditions, stronger digital skills, improved international market access and support for Pakistani technology companies seeking to scale globally.

The next test is faster, sustainable growth

Pakistan's IT export performance has improved substantially, with annual receipts rising from around $2.6 billion in FY23 to a record $4.6 billion in FY26. The sector is also now the country's largest source of services export earnings.

But the government's larger targets require a different scale of growth. The $10 billion FY29 goal would require roughly 30 percent annual growth from the FY26 base, while reaching $25 billion within five years from that base would require growth of about 40 percent a year.

The key question is therefore not whether Pakistan's IT exports are growing. The official data shows that they are. The challenge is whether investment, skills, infrastructure, market access and policy stability can lift that growth sufficiently to meet the government's much larger medium-term ambitions.