Pakistan’s ICT exports rise to $3.388 billion as structural gaps remain

ISLAMABAD: Pakistan’s information and communication technology and telecommunications sectors expanded during FY2026, with ICT exports reaching $3.388 billion and the trade surplus in IT and IT-enabled services rising to $2.911 billion, according to the Pakistan Economic Survey unveiled on Thursday.

The survey also showed that freelancers’ remittances increased to $856.3 million, underlining the contribution of Pakistan’s digital workforce to foreign exchange earnings. The government presented these figures as a sign of the sector’s resilience and its growing role in the economy.

At the same time, the survey data pointed to continuing weaknesses in the sector’s structure. The reported growth remained concentrated largely in outsourcing and freelance services, while Pakistan continued to trail regional peers in attracting large-scale foreign investment and building high-value technology products. The survey highlighted gains in exports and connectivity, but offered limited detail on how the country would shift from low-margin outsourcing toward higher-value technology exports.

The telecom sector generated Rs837 billion in revenues during the period and contributed Rs285 billion to the national exchequer in taxes and duties. By March 2026, broadband subscriptions had climbed to 161 million, taking total telecom subscriptions to 207.22 million and overall teledensity to 82.6%.

The Pakistan Telecommunication Authority also reported generating around $509.6 million, or approximately Rs142.6 billion, from its 5G spectrum auction held on March 10, 2026. However, the survey’s positive headline figures were accompanied by concerns over service quality, internet reliability and the state of digital infrastructure. Businesses have continued to report disruptions linked to inconsistent connectivity, an issue seen as affecting both productivity and investor confidence.

The survey noted that more than 5.14 million people had received digital skills training. Even so, questions remained over how effective these programmes have been in creating lasting employment. The figures were seen as highlighting the need for stronger job creation, entrepreneurship support and closer collaboration between industry and academia rather than training alone.

The data also pointed to a broader imbalance in the sector’s development. While the $856.3 million in freelance earnings reflected strong individual initiative, the reliance on gig work indicated that Pakistan had yet to make a sustained transition to enterprise-scale software contracts and full-fledged technology firms. The auction proceeds from the 5G spectrum sale, meanwhile, did not necessarily amount to an immediate fiscal windfall because the framework allows deferred licence payments by operators.

Commenting on the survey, Si Global CEO Dr Noman Ahmed Said said the official report did not sufficiently address key conditions needed to attract major overseas investment into the technology sector. "The report highlights achievements but provides little insight into attracting large-scale foreign direct investment into the technology sector. International investors generally seek policy stability, legal certainty, data protection frameworks, and ease of doing business – areas that require continued improvement," he said.

He also said the survey would have been stronger if it had included more detailed indicators on the sector’s performance and composition. "It would have been stronger had it disclosed export revenue per employee, export-oriented tech firms, new foreign clients, the product-to-services export ratio, R&D spending, AI and cybersecurity workforce data, and startup survival and funding rates," he added.

Said argued that long-term progress would depend on turning current gains into an innovation-led economy built around research, product development and skilled talent. He added that the report did not sufficiently cover venture capital activity, startup financing, female participation and employment outcomes from training programmes.

On the upcoming budget, he said the technology sector should be treated as a strategic export industry rather than facing a heavier tax burden. "The upcoming budget should focus on enabling growth rather than increasing the burden on a sector that is already contributing significantly to exports and employment. With IT exports crossing $3.8 billion in just 10 months and growing at over 20% annually, the upcoming budget should treat technology as a strategic export industry," Said concluded.