Bangladesh's software and IT service exports have crossed the $2 billion milestone, marking a pivotal moment for the country's technology sector. What started as a modest outsourcing industry in the early 2000s has evolved into a diversified ecosystem encompassing custom software development, SaaS products, freelance services, and IT-enabled services (ITES). This analysis examines the trajectory, drivers, and future outlook of Bangladeshi software exports.

Export Growth Trajectory: 2015 to 2025

According to data from the Bangladesh Association of Software and Information Services (BASIS) and the Bangladesh Bank, IT and IT-enabled service exports have followed a steep upward curve:

  • 2015-16: ~$800 million (combined formal and freelance channels)
  • 2017-18: ~$1 billion — the first psychological milestone
  • 2019-20: ~$1.3 billion, despite COVID-19 disruption in Q4
  • 2021-22: ~$1.6 billion, accelerated by remote work adoption
  • 2023-24: ~$1.9 billion
  • 2024-25: Exceeding $2 billion, driven by SaaS exports and growing enterprise contracts

It is worth noting that a significant portion of freelance earnings — estimated at $500-700 million annually — flows through informal channels and is not fully captured in official statistics. The actual figure is likely higher.

Key Growth Drivers

1. Cost Competitiveness Without Quality Compromise

Bangladesh offers some of the lowest software development costs in Asia. A senior full-stack developer in Dhaka costs roughly $18,000-$28,000 annually, compared to $35,000-$55,000 in India and $50,000-$80,000 in Eastern Europe. Companies like Nexis Limited leverage this cost advantage while maintaining international quality standards, delivering enterprise products such as Ultimate HRM and Digital School to clients worldwide.

2. Government Tax Incentives

The Bangladesh government has provided a complete tax exemption on IT service export revenues through 2027. This zero-tax policy on software export income has been a powerful incentive for companies to focus on international markets. Additionally, import duties on IT equipment have been reduced or eliminated for registered software companies.

3. Demographic Dividend

Bangladesh has a population of approximately 170 million, with a median age of 28 years. Over 150 public and private universities offer computer science and engineering programs, producing 30,000+ IT graduates annually. This pipeline of young, trained professionals fuels sustained industry growth.

4. Freelance Economy Contribution

Bangladesh ranks second globally on platforms like Upwork and Fiverr by number of active freelancers. Over 650,000 registered freelancers contribute to software exports through web development, mobile app development, WordPress customization, and graphic design services.

Export Destinations and Service Mix

The United States remains the largest market for Bangladeshi software exports, accounting for approximately 30% of revenues. Europe (particularly the UK, Germany, and Scandinavian countries) contributes about 25%, while Japan accounts for roughly 15% — largely through dedicated development centers operated by companies like BJIT Group.

The service mix has shifted notably. Five years ago, staff augmentation and basic outsourcing dominated. Today, the portfolio includes:

  • Custom enterprise software development
  • SaaS product exports (Therap BD, SSL Wireless, and others)
  • Mobile application development
  • QA and testing services
  • AI/ML and data engineering
  • UI/UX design services

Challenges to Sustained Growth

Infrastructure Gaps

While Dhaka has seen significant infrastructure improvement, power supply reliability and internet bandwidth outside major cities remain inconsistent. The government's hi-tech park initiative aims to address this by building purpose-built technology campuses with guaranteed power and high-speed connectivity.

Mid-Level Talent Shortage

Although Bangladesh produces a large number of graduates, industry leaders report a shortage of engineers with 5-10 years of experience in specialized domains like cloud architecture, DevOps, and data engineering. This mid-level gap is a constraint on scaling enterprise-grade operations.

Outlook: Targeting $5 Billion by 2030

The Bangladesh government has set a target of $5 billion in IT exports by 2030. Reaching this goal requires a compound growth rate of approximately 20% — ambitious but not unrealistic given recent performance. Key enablers will include expanded hi-tech park infrastructure, continued tax incentives, and increased focus on higher-value services.

Companies like Nexis Limited are at the forefront of this shift, moving beyond service delivery to build proprietary software products with global market potential. The transition from labor arbitrage to product-led growth will ultimately determine whether Bangladesh meets its $5 billion target. For partnership inquiries, contact the Nexis team.