The Ministry for Industries and Production has outlined significant challenges facing Pakistan’s mobile device manufacturing sector, citing taxation and policy gaps as major hurdles.

In a written reply to the National Assembly, the Ministry highlighted that the imposition of an 18% sales tax has narrowed the price gap between locally manufactured devices and imported models, intensifying competition. Local manufacturers find it increasingly difficult to compete with imported phones due to this tax, reducing the incentive for consumers to choose locally produced options over imported ones.

Another critical issue is the lack of a comprehensive tariff structure for localizing parts and components. This absence has hindered efforts to increase domestic production of mobile device parts, an essential step toward full localization.

With the expiration of the Mobile Device Manufacturing Policy (MDMP) in June 2023, stakeholders are eagerly awaiting a successor policy to address these gaps. The new Mobile Device Manufacturing and Export Policy (MDMEP) 2024-27, currently in the consultation phase, aims to resolve these industry concerns and promote long-term growth.

The MDMEP 2024-27 policy, expected to be finalized soon, focuses on three core objectives: sustainability, localization, and export promotion. It aims to reduce Pakistan’s reliance on imported mobile devices by encouraging the use of locally manufactured products.

At present, approximately 93 percent of mobile handsets sold in Pakistan are assembled locally, showcasing the country’s potential for domestic production. Nearly all major international brands have set up assembly facilities within Pakistan, marking a positive trend for the sector despite the existing challenges.

Industry representatives are advocating for the expansion of the upcoming policy to include products beyond mobile phones. They propose incorporating devices like smartwatches, SIM-based tablets, point-of-sale (POS) machines, laptops, infotainment systems, and tracking devices in the policy framework. Such inclusivity could diversify the industry’s portfolio and stimulate growth across a broader range of electronic products, thus boosting the country’s tech manufacturing capabilities.

So far, the government has issued licenses to 37 manufacturers to establish local production facilities under the existing mobile device manufacturing framework.