IT exports witness slight rise in July-March

Bangladesh's IT exports witnessed a slight rise in the first nine months of the current financial year, buoyed by growing global demand for AI-powered services.

According to data from the Export Promotion Bureau (EPB), export earnings from the IT sector rose by 12.99 percent year-on-year, reaching $458.18 million between July and March of FY 2024-25.

In the same period a year earlier, exports stood at $407.07 million.

The growth comes as a positive development for the sector, which had experienced a significant slowdown in recent years.

In FY 2022-23, Bangladesh's IT exports declined for the first time in five years. The following year, growth was limited to just 2 percent.

This prolonged digital blackout dealt a serious blow to the IT industry. Many firms reported missed deadlines, disrupted communication with overseas clients, and halted development work.

Among the key segments, IT-enabled services (ITES) remained the largest contributor, registering a 9.36 percent increase to $395.31 million.

Software exports grew modestly by 4 percent to $30 million.

However, the most striking growth was observed in computer consultancy services, which jumped by 102 percent to $30 million.

Installation, maintenance, and repair services related to computer and peripheral equipment also saw a 26 percent rise to $2.95 million.

Industry leaders attributed this rebound to the increasing adoption of AI-powered solutions in global markets.

"The sector is gradually recovering, not through direct AI products like ChatGPT, but through platforms and software that enhance efficiency and maximise tasks with the help of AI," said Raisul Kabir, CEO of Brain Station 23, one of the country's leading software firms.

He stressed that while AI-related orders were increasing, the overall global market remains sluggish.

He pointed out a regulatory hurdle.

While Bangladesh Bank recently allowed startups less than 10 years old to invest up to $10,000 abroad for setting up legal entities, restrictions still prevail on established IT firms.

"As exporters of software and services, we desperately need this facility. A small policy amendment could unlock much greater potential," he said.

Fahim Mashroor, former president of the Bangladesh Association of Software and Information Services (BASIS), urged caution in interpreting the growth.

"Much of this year's rise is a rebound from the negative trends of the last two years. It's not a sustained upward trajectory yet," he said.

He also said Bangladesh continues to lag behind neighbours like India and Pakistan in terms of overall IT export performance.

M Manjur Mahmud, president of Datasoft Systems, highlighted that the actual size of Bangladesh's IT exports could be much higher than what the EPB data shows.

"Many small companies and freelancers remit earnings that aren't captured in official figures. The true figure might be more than double," he said.

Mahmud recommended that Bangladesh follow Vietnam's model, where local firms provide cutting-edge solutions for national ID, toll management, treasury, and port operations.

"If we prioritise local companies in such critical projects, the IT export potential could grow tenfold," he said.

As demand for AI-powered solutions increases, Bangladesh's IT industry sees a new path for growth — one that hinges on policy reforms and local industry empowerment, he added.

The fiscal year was also marred by government-imposed internet shutdowns and widespread connectivity disruptions, severely affecting the IT sector's productivity and global reputation.

In July and August 2024, amid student protests demanding reforms to the public job quota system, the government enforced a sweeping crackdown that included disabling digital communications.

Mobile internet services were suspended for over 10 days, while broadband services remained offline for five days in July.

Although broadband was restored on July 24 and mobile internet on July 28, heavy restrictions on social media platforms and the implementation of deep packet filtering mechanisms continued to hamper connectivity until August 5 — the day the previous regime collapsed.