KARACHI: The State Bank of Pakistan (SBP) announced several facilities on Thursday to support the expansion of the IT business abroad and exports.

The government aims to increase IT exports to $25 billion by 2029. However, proceeds were estimated at around $3.2bn in FY24.

According to an SBP circular, the foreign exchange manual has been revised to further facilitate export-oriented companies, particularly those operating in the IT sector, in expanding their footprints abroad and increasing the country’s exports.

IT export companies are thriving in the GCC region, particularly in Saudi Arabia. Factors such as the SBP’s relaxation of permissible retention limits, increasing them from 35 per cent to 50pc in the Exporters’ Specialised Foreign Currency Accounts (ESFCAs) and rupee stability are encouraging IT exporters to repatriate a higher portion of profits back to Pakistan.

The central bank has introduced a new Equity Investment Abroad (EIA) category for export-oriented companies operating in the IT sector.

The amendment removed the requirement of prior designation of banks for exporters utilising funds for EIA from ESFCAs.

It has been permitted for export-oriented companies in the IT sector to acquire interest (percentage of shareholding) in entities abroad, said the SBP circular.

It has relaxed restrictions on establishing and acquiring one entity per jurisdiction for export-oriented companies in the IT sector.

The share of IT exports in total goods and service exports has risen from 4 per cent in FY19 to almost 8 per cent in FY24.

Published in Dawn, July 12th, 2024