Pakistan has significantly ramped up local assembly of global mobile phone brands, now meeting 95% of the country’s demand domestically. This shift has reduced imported phone sales to just 5%, marking a substantial decrease in foreign exchange expenditure.
According to a report citing Pakistan Telecommunication Authority (PTA) data titled ‘Pakistan Market – Local Manufacturing/Assembly of Mobile Phones up 55% year-on-year in May 2024’, the surge in local assembly is a stark contrast to previous years. In 2016, only 1% of mobile phones were assembled locally, with imports making up the remaining 99%. However, from January to May 2024, local manufacturing accounted for 95% of phones (13.08 million units), while imports constituted just 5% (0.75 million units).
Idrees Memon, former chairman of the Karachi Electronic Dealers Association, highlighted that nearly all global brands, except Apple, are now assembled locally, mainly by Chinese manufacturers. This localization effort has not only bolstered local production capabilities but also led to significant savings in foreign exchange, estimated at about 70%.
Memon emphasized the favorable duty structure for local assemblers, with nominal duties on phone kits compared to much higher taxes on fully imported units. This has encouraged approximately 18-20 companies to establish manufacturing setups in Pakistan, generating substantial direct and indirect employment opportunities.
The surge in local production has been driven by increased demand post-Covid-19, as more people in Pakistan adopted smartphones for digital solutions. Despite this success, challenges loom, such as the imposition of an 18% sales tax on phones effective July 1, 2024, which may impact exports.
Overall, Pakistan’s shift from imported to locally assembled mobile phones underscores a strategic economic shift, offering more affordable options to consumers and reducing reliance on imports significantly.
