Pakistan’s Services Exports Hit $5.66 Billion as IT Sector Powers Record Growth in FY26

Pakistan’s export narrative has long been dominated by cotton, textiles, and rice. But quietly, persistently, a different story has been building, one written in code, not commodities. In the first seven months of the current fiscal year, Pakistan’s services exports reached $5.66 billion, up 18.78% from $4.76 billion in the same period last year, according to data from the Pakistan Bureau of Statistics. The IT and telecom sector sits at the heart of this growth, and the numbers suggest this is no temporary spike.

Steady, Month-by-Month Momentum

What makes this performance notable is its consistency. Services exports have posted year-on-year gains every single month since July 2025.

Growth came in at 18.27% in July, followed by 8.41% in August, 14.85% in September, 17.61% in October, 22.26% in November, and 15.94% in December. January 2026 delivered the strongest single-month reading yet, a 31.12% year-on-year jump, with exports reaching $885.09 million compared to $675.03 million in January 2025.

That January figure is significant. It signals that momentum is not only holding but accelerating heading into the second half of the fiscal year. On a month-on-month basis, exports eased by 6.34% from December, but that follows a particularly strong December, making the dip largely technical.

IT and Telecom Lead the Charge

The State Bank of Pakistan’s data makes the engine behind this growth unmistakably clear. Exports of telecommunications, computer, and information services reached $2.61 billion in July–January FY26, up 19.72% from $2.18 billion in the same months last year.

This sub-sector, which encompasses software services, IT-enabled services, and digital exports by freelancers and tech firms, has been the anchor of services export growth since at least February 2024. It now represents nearly half of Pakistan’s total services export earnings.

A concrete marker of this acceleration: monthly IT export revenue crossed $437 million in December 2025, the first time Pakistan’s IT exports exceeded the $400 million threshold in a single month. Analysts describe it not as an isolated spike but as confirmation of a sustained upward trend.

What Is Fueling the Growth?

Several factors have converged to drive this expansion. Policy reforms have played a meaningful role. The State Bank of Pakistan raised the foreign currency retention limit for IT exporters from 35% to 50%, allowing firms to reinvest earnings abroad and strengthen international client relationships.

On the demand side, global outsourcing trends have worked in Pakistan’s favour. Companies worldwide are increasingly outsourcing software development, cybersecurity, and digital transformation projects, and Pakistani firms have positioned themselves as affordable, capable partners in this space.

Freelancers have also been a significant driver, delivering high-value services across international platforms in areas ranging from web development and digital marketing to AI-driven workflows. Pakistan ranks among the top countries globally in freelancer numbers and second globally in digital labour, according to the Pakistan Economic Survey 2024-25, a workforce generating foreign exchange earnings largely outside formal trade channels.

In Rupee Terms: A Double Gain

The growth story looks even stronger when measured in local currency. Services exports increased 20.22% in rupee terms to Rs1.593 trillion in 7MFY26, up from Rs1.325 trillion in the same period last year. This double-digit rupee gain, running slightly ahead of the dollar-denominated growth rate, reflects the compounding benefit of exchange rate dynamics for IT exporters who earn in foreign currency.

Contrasting Fortunes With Commodity Exports

The divergence between services and goods exports is becoming harder to ignore. While commodity exports. particularly textiles, have shown mixed results; services exports have delivered unbroken growth since the start of the fiscal year. This contrast raises a deeper structural question: is Pakistan’s export base shifting, and if so, how quickly?

IT exports now make up over 10.8% of Pakistan’s total exports, a share that has grown steadily over recent fiscal years. The sector’s relative insulation from port bottlenecks, shipping costs, and commodity price cycles makes it an increasingly attractive pillar of the export economy.

The Road to $5 Billion, and Beyond

The government has set an ambitious target of $5 billion for IT exports alone in FY26, a figure that looked aspirational not long ago but now sits within reach given the current trajectory.

The longer-term ambition is even bolder. Under the Uraan Pakistan plan, the government has targeted $10 billion in annual IT exports by 2028-29. Hitting that number would require maintaining and expanding the kind of growth Pakistan is currently posting, consistently, across multiple fiscal years, against intensifying regional competition.

A Structural Shift in the Making

The 18.78% growth in services exports over seven months is more than a good data point; it is evidence of a structural change quietly underway in Pakistan’s economic foundations. For the first time in a long time, Pakistan has an export sector that grows regardless of rainfall, cotton prices, or textile quota allocations.

The real test will not be whether Pakistan’s IT sector can keep posting impressive monthly figures. It will depend on whether the country can build the infrastructure, policy consistency, and talent pipeline needed to hold its ground as regional competition from India, Bangladesh, and Vietnam intensifies, and as global client expectations continue to rise.