Export remittances from Information Technology (IT) and IT-enabled Services (ITeS) have witnessed a notable uptick, registering a 4.4 percent increase in the initial four months (July-October) of the current fiscal year 2023-24 (FY24). The sector’s remittances reached $893 million, showcasing significant growth compared to the $855 million recorded in the corresponding period of the previous fiscal year.
Official data further reveals a substantial month-on-month (MoM) surge of approximately 15 percent in October 2023, with ITeS export remittances reaching $238 million, surpassing the $206 million recorded in September 2023. On a year-on-year (YoY) basis, the sector experienced a robust 7.6 percent increase compared to October 2022, where export remittances amounted to $221 million.
Despite this positive trajectory, the Ministry of Information Technology and Telecommunication has identified various constraints that impede the full potential of the country’s information technology sector, which aspires to achieve $15 billion in exports. Noteworthy challenges include policy inconsistencies, taxation issues, and banking hurdles.
Official documents disclose that the IT and ITeS exports have demonstrated remarkable growth over the past five years, soaring by an impressive 178 percent. This growth, marked by a compound annual growth rate (CAGR) of 30 percent, stands as the highest among all local industries in services. It surpasses the growth rate of the textile sector, which stands at 148 percent.
However, the industry faces hurdles that hinder its sustained growth. Inconsistencies in policies have eroded the confidence of both local and international investors, customers, and partners. Frequent changes in taxation policies, particularly on IT and ITeS export proceeds, stand out as examples of challenges that demand attention for the sector’s sustained growth.
