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Despite local and global uncertainty, Bangladesh’s expanding ICT sector did rather well in 2022.
ICT exports from the country reached record highs last year as a result of businesses in the sector receiving an increasing number of orders from international customers for software, data processing, and IT-enabled services (ITES).
Export Promotion Bureau (EPB) statistics show that by the first quarter of 2022, local IT companies’ export revenues had increased by 52% year over year (YoY) to $369 million.
The earnings from the July-April period of FY 2021-22, were 35.59% more than the target set for the sector in that period.
The growth was amid the Russia-Ukraine war that had disrupted almost all economies around the globe, including export destinations of Bangladesh IT services, which insiders initially thought would adversely impact the local IT sector.
However, in 2022, Bangladesh IT firms have expanded their global footprint, crossing the $1.4 billion annual export milestone, through offering services in the form of software and ITES.
As per the Bangladesh Association of Software and Information Services (Basis) export earnings from IT services are more than the EPB figures as government figures do not include the earnings of freelancers and service providers who bring their export proceeds through unofficial channels.
Experts pointed out that Ukraine was one of the top IT and ITES providers prior to the ongoing war, and some of their orders got diverted to Bangladesh.
Additionally, work orders are coming in from EU and US markets as IT firms in those markets are struggling to meet demands as job switching has intensified.
Omar Sharif, managing director of IT and ITES exporting company, focused on the US market, said that their export earnings doubled in the first half of the year thanks to growing demands for call centre agents as well as software from clients in the Texas region.
“All the top local IT companies performed well last year and they are expanding,” said Shariff, citing how his organization has been hiring more and more in response to the growing demand of its foreign clients, since the beginning of last year.
More than 350 local firms are now exporting IT products to around 80 countries including the US and the European Union countries, according to Basis
However, in 2022, the Local IT sector also faced three key challenges, according to Syed Almas Kabir, former president of Basis, which are foreign exchange regulation and revenue issues, poor internet connectivity, infrastructure and lack of skills for high-end IT products.
Pandemic-induced disruptions to supply chains, soaring US dollar and energy prices and the Russia-Ukraine war, as well as the imposition of new taxes this year on broadband, smartphones, laptops and digital services, have brought in digital entrepreneur and consumer suffering.
The National Board of Revenue (NBR) has imposed a 15% VAT on laptop imports, a 10% advance income tax on broadband internet service and a 5% VAT on mobile phone sales.
Entrepreneurs in the IT sector as well as consumers also suffered, as smartphones devices and the internet are crucially linked to the IT sector.
During the same year, in the current fiscal budget, the government imposed a 5% VAT on online sales and deliveries and excessive import duties impeded the growth of the e-commerce sector, which is deeply connected to startups of the country and the ICT sector.
(DT)
