By Ariba Shahid

KARACHI (Reuters) – Pakistan’s economy could lose up to $300 million due to internet disruptions following the introduction of a national firewall, the Pakistan Software Houses Association (P@SHA) said in a press release on Thursday.

Islamabad is implementing an internet firewall to monitor and regulate content and social media platforms, local media reported. The government denies using the firewall for censorship purposes.

Ali Ihsan, vice chairman of P@SHA, said the introduction of the firewall had already led to prolonged internet connection outages and erratic VPN performance, which could lead to a “complete collapse of business operations”.

“These disruptions are not mere inconveniences, but a direct, tangible and aggressive attack on the viability of the industry. They are causing devastating financial losses estimated at $300 million and capable of rising exponentially,” he said in the statement.

The Pakistan Telecommunications Authority and Pakistan’s Minister of State for Information Technology Shaza Fatima Khawaja did not immediately respond.

Earlier this month, Khawaja told local media that the government had no plans to use firewalls as a form of censorship.

Pakistan has blocked access to social media platform X since elections in February, when jailed former Prime Minister Imran Khan won the most seats despite a crackdown and a ban on his party.

The government has said the ban is intended to prevent X from engaging in anti-state activities and flouting local Pakistani laws. Human rights activists say the ban on X is aimed at suppressing critical voices and democratic accountability in the country.

In its statement, P@SHA said the government’s lack of transparency regarding the firewall had sparked “a storm of mistrust” among Internet users and Pakistan’s global IT customers who fear that their proprietary data and privacy would be compromised.

P@SHA called for an “immediate and unconditional end to this digital siege” and urged the government to work with industry to develop a cybersecurity framework.

Pakistan recorded IT exports worth $298 million in June, up 33% year-on-year. In the fiscal year ended June, IT exports stood at $3.2 billion, up 24% from the $2.5 billion in fiscal 2023.

(Reporting by Ariba Shahid in Karachi; Editing by Ros Russell)