IT exports grew 9% in FY26, but AI concerns mount

Industry leaders warn the pace will be hard to sustain as AI takes over work that Bangladesh has long supplied to developed economies

Bangladesh’s IT exports grew moderately in FY2025-26, but industry leaders warn that artificial intelligence (AI) could make the gains harder to sustain as it automates work traditionally outsourced to countries such as Bangladesh.

Data from the Export Promotion Bureau (EPB) show that computer services exports rose 8.68 percent year-on-year to $684.15 million in July-June of FY2025-26, up from $629.51 million in the previous fiscal year.

Computer software exports increased 8.82 percent to $48.38 million from $44.46 million a year earlier, but fell 12.04 percent short of the $55 million target.

Rashad Kabir, chief executive officer of Dream71 Bangladesh Ltd, described the increase as a promising sign but warned that sustaining the momentum would be difficult.

“Our exports have increased in the last fiscal year, which is a very hopeful sign, and there is growth. But continuing this growth will be very difficult,” he said.

AI is making software development easier, but its full impact on the industry has yet to be felt, Rashad said. He expects sustaining export growth in the current fiscal year to be considerably more challenging.

Raisul Kabir, co-founder and chief executive officer of Brain Station 23 Ltd, said software export growth reflects a shift in demand rather than a straightforward increase or decline in business.

Demand for traditional staff augmentation is declining. Foreign companies that previously hired five external professionals, such as software engineers, may now need only three, Raisul said.

To help local firms expand overseas, he suggested that the EPB replicate aspects of the Japan External Trade Organization’s approach, which provides businesses with support to establish operations abroad, including legal and consultancy services. Bangladeshi firms often lack such support when entering foreign markets, he said.

IT-ENABLED SERVICES EARN BIG

IT-enabled services, including computer data processing, business process outsourcing (BPO) and hosting, accounted for nearly 88 percent of computer services exports.

The segment earned $604.97 million in FY2025-26, up 11.28 percent from $543.66 million a year earlier, but fell 14.19 percent short of the $705 million target.

Industry leaders say the growth masks mounting pressure on businesses as AI changes client expectations and intensifies competition.

Apel Mahmud Khan, managing director of BZM Graphics Limited, said AI was allowing companies to complete work faster while making price negotiations tougher and increasing competition in international markets.

Businesses dependent on routine tasks face growing pressure, while quality control, complex assignments, reliability and client trust are becoming more important, he said.

“Those who can change their skills and processes with time will move ahead. Those who ignore the change may find it hard to survive,” Apel added.

Kowser Ahmed Nirob, co-founder and chief executive officer of The KOW Company Ltd, a Dhaka-based content post-production and BPO firm, said businesses focused solely on content production were seeing much of their work shift to AI.

Companies providing AI-enabled services, including running, maintaining and ensuring the quality of AI systems, are more likely to remain viable in the short term, he said.

His company’s workforce, which once exceeded 600, has fallen to fewer than 400. The company now hires only people who can work with AI-assisted workflows.

“In my opinion and personal experience, AI has already done damage to us. The sad part is that we still do not understand how much,” he said.

The company has since launched a cybersecurity firm and is preparing to introduce a virtual try-on system to diversify its business.

UNEVEN, SLUGGISH GROWTH

Not all segments of computer services exports shared in the growth.

Computer consultancy exports fell 28.66 percent to $25.19 million from $35.31 million a year earlier, missing the $50 million target by 49.62 percent.

Exports of computer installation, maintenance and repair services declined 7.72 percent to $5.62 million from $6.09 million, falling 19.71 percent short of the $7 million target.

Syed Almas Kabir, president of the Bangladesh Association of Software and Information Services (BASIS), said the growth in computer services exports was welcome but insufficient to achieve the industry’s long-standing ambition of reaching $5 billion in IT exports.

“The growth is there, but this 8 or 10 percent should have been a bit higher,” he said, adding that the industry needed to accelerate growth to reach its target.

AI disruption is weighing on the sector as freelancers and outsourcing firms lose assignments that can now be completed using the technology, Syed Almas said.

Bangladesh’s large volume of two-dimensional graphics work has largely dried up, he added.

Workers engaged in such activities must upgrade their skills, move to higher-value work and learn to use AI to remain competitive, he said.

The industry must also adopt emerging technologies, particularly AI and data analytics, while developing the skills needed to use them to accelerate export growth.