A recently released PBC-CDPR report confirms that the IT exports of Pakistan have increased from $1.67 billion in FY21 to $3.24 billion in FY25. The headline looks great, but the analysis that follows is alarming. Pakistan may be exporting more IT services than before, but the quality of IT work exported by the country is declining.
The exports of computer services in Pakistan increased from $1.67 billion in FY21 to $3.24 billion in FY25, almost doubling in four years to become one of the very few sectors of Pakistani exports which show consistent growth in dollars. Overall ICT exports stood at $3.81 billion. All of this was achieved despite the difficult macroeconomic conditions, volatile exchange rate environment, and poor domestic demand situation prevailing in Pakistan at the time. It produced a positive trade balance for Pakistan despite Pakistan desperately needing one. However, the fragility in Pakistan IT exports growth story of 2026 does not lie in their veracity. They are.
Freelancing Dilemma Increased Action, Decreased Value per Deal
The most paradoxical conclusion drawn by the PBC-CDPR report relates to freelancing, which accounts for the largest share of Pakistan’s recorded IT export transactions. Although total freelancing deals have risen from FY21 to FY25, the median value of each deal has dropped significantly during the same time frame. While more Pakistanis are earning from their freelance efforts, the average transaction made by them is of much lower value. This is where the Pakistan IT exports growth fragility alert lies: a business may be growing in volume, but it is losing depth strategically.
The IT export portfolio in Pakistan continues to consist predominantly of services with low-to-medium levels of added value – freelancing, staff augmentation, and BPOs. This is where Pakistan’s competitive advantage lies and where it was able to make its money. But it is exactly in these areas where AI poses the greatest threat. The very jobs that have enabled Pakistan to earn foreign exchange from IT have become increasingly obsolete due to faster and cheaper automated processes.
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What is actually happening due to AI with Pakistan’s IT Export Model
This warning about AI is more structural than speculative. The traditional export business model relied on selling hours – a programmer’s time, a designer’s labor, a content writer’s work. AI will not immediately render this business obsolete, but it will certainly drive down prices for what used to be offered. Even more critically, it will accelerate a trend away from what sophisticated customers are buying. They now prefer results, expertise in the subject matter, products, reputation, and delivery capability. This is exactly the area in which Pakistan’s IT export industry continues to underperform compared to other major contenders such as India, the Philippines, or Eastern Europe. The fragility of Pakistan’s IT exports growth is therefore rooted in this very structural problem – the model that the industry was based upon no longer applies to the market.
Constraints of Regulatory and Banking Systems Hindering the Growth of the Sector
The Pakistan IT exports growth vulnerability is not due only to the lack of skill or brand. The regulatory framework itself penalizes those formal IT practices that would allow for upgrading the industry along the value chain. Uncertainties regarding taxes drive IT workers into informal structures. Banks cause delays for foreign transactions. Limited foreign exchange flexibility prevents IT exporters from maintaining accounts in dollars, paying vendors abroad, using cloud computing or managing international businesses. The best solution may be keeping money abroad – which implies that Pakistan is underreporting its IT industry.
The Window Pakistan Must Not Miss Out On
While the warning about Pakistan’s IT exports fragility in view of AI compression and competition in the PBC-CDPR report may sound pessimistic, it is actually rather realistic concerning the current situation in the sector and what needs to happen for Pakistan to be on a stable path before time runs out. In other words, the report highlights the window of opportunity Pakistan still has for moving from its current position of IT hours exporting to IT results exporting by building products, gathering domain expertise, luring captive operations, and creating the country brand to make the international buyers comfortable enough to sign long-term deals. The momentum in the sector is quite strong at the moment, but whether this momentum will persist through the shift from a volume-based business model to a value-based one remains an open question.
