Pakistan may face financial losses amounting to $300mn due to the imposition of a national firewall, according to a statement from the Pakistan Software Houses Association (P@SHA) on August 15.

Local media reports indicate that Pakistan is implementing a nationwide firewall designed to regulate internet usage. This firewall is expected to control access to social media platforms, including Facebook, YouTube, and X, and will enable the government to track IP addresses.

P@SHA has strongly condemned the implementation of the national firewall, warning of its severe impact on the country’s IT industry. "The booming IT industry is facing a disaster, grappling with unprecedented operational disruptions that threaten the very foundation of Pakistan’s burgeoning tech sector," P@SHA stated. The association highlighted that the firewall has led to prolonged internet outages and erratic VPN performance, severely disrupting business operations.

“These disruptions are not mere inconveniences but a direct and aggressive assault on the industry’s viability, inflicting devastating financial losses estimated to reach $300mn, with the potential for further exponential increases," P@SHA added.

A mass exodus of IT companies is not just a possibility but an imminent reality if immediate and decisive action is not taken, it said. The organisation has called for an "immediate and unconditional halt to this digital siege" and urged the government to engage in dialogue with industry stakeholders to develop a cybersecurity framework that protects national interests without hindering innovation and growth.

While the Pakistani government had previously denied the existence of such a firewall, a report by Dawn on August 16 revealed that the country's IT minister finally confirmed that the government was upgrading its ‘web management system’ to tackle cybersecurity threats.

Many internet users in Pakistan have reported slow browsing speeds, arbitrary blocking of social media platforms, and connectivity issues with WhatsApp on mobile data, which are believed to be caused by the firewall. Until now, official stakeholders such as the Ministry of Information Technology and Telecommunication and the Pakistan Telecommunication Authority (PTA) had attributed these issues to telecom and internet service providers, according to Dawn.