Pakistan’s IT exports exceed $2 billion, says PSEB chief

Karachi: Pakistan’s export of Information Technology (IT) and IT-enabled services (ITES) amount to $2.2 billion in fiscal year 2014-15, according to Pakistan Software Export Board (PSEB) Managing Director Asim Husain.

In an emailed response , PSEB’s chief said freelancers’ contribution in the IT exports of FY15 was $100 million – one-third of $300 million the IT sector generated from domestic sales during the year under review.

“Total revenue of the IT industry is around $2.5 billion a year at present,” Husain said, which means 88% of IT industry’s revenue come from exports alone.

It is pertinent to mention here these figures are based on statistics compiled by PSEB, the apex government body, which has the mandate to promote the country’s IT industry locally and internationally. The aforementioned data therefore, may not reflect the actual size of the country’s IT exports as some IT remittances are not properly documented.

State Bank of Pakistan (SBP) had estimated the country’s IT exports to be $370 million in FY14. However, the PSEB was not sure if the number was accurate.

The central bank categorises IT exports under six categories, PSEB says, but sometimes banks don’t properly report IT exports to the SBP thus, some of it may not show up as IT exports. In most cases, companies are transferring only the cost of their operations to Pakistan and keeping remaining earnings abroad, PSEB says.

To ascertain the actual size of Pakistan’s IT exports, PSEB had started working on this area earlier this year – it had projected the IT remittances (revenues) for FY2015 to clock in at $500 million and set a target to double the amount to $1 billion during the next five years.

However, the updated figures clearly indicate the PSEB has exceeded its own projection by quite a big margin.

“Pakistan’s IT industry has come a long way and is today the fastest growing export sector of Pakistan,” Husain said in a post on the PSEB’s website. From less than $20 million in annual exports as of fiscal year 1999-2000, PSEB says, the country’s annual IT exports have increased to $2.2 billion now at an annual growth rate of 41%.

In 2000, the MD said there were virtually no companies with revenues exceeding $1 million but at present more than 50 IT companies have reported exports in excess of that amount.

IT and ITES, PSEB says in a recent report, “are capable of providing a full spectrum of services, ranging from low-end BPO services to high-end enterprise grade IT solutions.”

Calling it “an extremely vibrant part of Pakistan’s economy,” PSEB says this sector is made up of a significant number of large IT companies, which hold local back offices or representative offices serving some of the world’s largest businesses to meet all their IT needs.