Business

‘Made in Pakistan’ mobile phones meet 95% of the local demand

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Staff Reporter

2 years ago

Pakistan presently assembles 95% of the country’s domestic mobile phone demand domestically after greatly increasing the localization of global phone brands. Due to this adjustment, sales of imported phones have dropped to just 5%, significantly lowering foreign exchange costs.

The increase in local assembly is a sharp contrast to prior years, according to research titled “Pakistan Market – Local Manufacturing/Assembly of Mobile Phones up 55% year-on-year in May 2024,” which cites data from the Pakistan Telecommunication Authority (PTA). In 2016, just 1% of mobile phones were put together domestically; the other 99% were imported.

Former Karachi Electronic Dealers Association chairman Idrees Memon said that almost all international brands aside from Apple are now built domestically, primarily by Chinese producers. In addition to strengthening local manufacturing capacities, this localization drive has resulted in considerable foreign exchange savings—roughly 70%.

Memon highlighted that local assemblers benefit from a favorable duty regime, whereby phone kits are subject to nominal duties while fully imported handsets are subject to substantially higher taxes.

This has prompted some 18–20 businesses to set up manufacturing facilities in Pakistan, creating a significant number of direct and indirect job opportunities.

But from January to May 2024, 95% of phones (13.08 million units) were made locally, with imports making up only 5% (0.75 million units).

After COVID-19, more people in Pakistan chose smartphones as a means of accessing digital solutions, which in turn drove a rise in demand and a surge in local production. Challenges remain despite this achievement, such as the 18% sales tax on phones that will go into force on July 1, 2024, which could influence exports.

All things considered, Pakistan’s transition from imported to locally made cell phones highlights a calculated economic turn, providing customers with more reasonably priced options and drastically lowering dependency on imports.

Staff Reporter