According to the Ministry of Industries and Production, tax and legal problems are the main causes of the several difficulties Pakistan’s mobile phone manufacturing sector is now facing. The Ministry noted in a recent answer to the National Assembly that the 18% sales tax on domestically manufactured handsets has drastically lowered the price gap between locally made phones and imported phones, therefore making local producers more less able to compete.
This charge makes customers less likely to choose locally made goods over imported ones. Other major issues are the lack of a thorough and exact pricing system for component localization of mobile devices. This lack of structure has hampered the industry’s attempts toward complete localization as well as efforts to boost local production of critical mobile components.
Stakeholders strongly expect a new policy to be adopted after the Mobile Device Manufacturing Policy (MDMP) expires in June 2023, so the sector is in a state of uncertainty right now. We are now consulting on the following Mobile Phone Manufacturing and Export Policy (MDMEP) 2024–27 in order to address these issues and promote the long-term growth of the sector. To lessen Pakistan’s reliance on imported mobile phones, the new plan should give three main priorities—sustainability, localization, and export promotion—three top priority. Given Pakistan’s present production of about 93% of the mobile phones sold there, there is clearly great opportunity for homegrown manufacture. Notwithstanding the challenges, the sector has bright future as almost all of the big foreign phone companies have set assembly facilities in Pakistan.
Industry lobbyists also advocate for the new rules including electronic gadgets other than mobile phones. They advise the company to diversify and boost the nation’s technological production capabilities by adding smartwatches, tablets, laptops, infotainment systems, point-of-sale systems, and monitoring gadgets. Already, the present mobile device paradigm grants licenses to 37 businesses for the building of local production facilities.
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