The country’s economy could lose up to $300 million due to internet disruptions caused by the imposition of a national firewall, the Pakistan Software Houses Association (P@SHA) said in a press release on Thursday.

The government is implementing an internet firewall to monitor and regulate content and social media platforms. The government denies the use of the firewall for censorship.

Ali Ihsan, senior vice chairman of P@SHA, said the imposition of the firewall has already caused prolonged internet disconnections and erratic performance of virtual private networks, threatening a “complete meltdown of business operations”.

“These disruptions are not mere inconveniences; but, a direct, tangible and aggressive assault on the industry’s viability inflicting an estimated and devastating financial losses estimated to reach $300m, which can further increase exponentially,” he said in the statement.

Minister of State for Information Technology Shaza Fatima Khawaja did not immediately respond. Earlier this month, she said that the government did not plan to use firewalls as a form of censorship.

The government has already blocked access to social media platform X since the February elections in which the PTI won the most seats despite a crackdown and ban on it.

The government has said the blocking was to stop anti-state activities and a failure by X to adhere to local Pakistani laws. Rights activists say the blocking of X is designed to stifle critical voices and democratic accountability in the country.

In its statement, P@SHA said that the government’s lack of transparency around the firewall had “ignited a firestorm of distrust” among internet users and Pakistan’s global IT clients who fear their proprietary data and privacy will be compromised.

P@SHA demanded an “immediate and unconditional halt to this digital siege” and called on the government to engage with the industry to develop a cybersecurity framework.

The country recorded $298m in IT exports in June, up 33 per cent from the year before. During the fiscal year that ended in June, IT exports were worth $3.2 billion, up 24pc from $2.5bn in the fiscal year 2023.