Pakistan mobile device manufacturing sector is facing significant challenges due to various factors, including taxation and policy gaps.
The imposition of an 18% sales tax has narrowed the price gap between locally manufactured and imported devices, making it difficult for local manufacturers to compete. Additionally, the lack of a comprehensive tariff structure for localizing parts and components has hindered the growth of the sector.
The expiration of the Mobile Device Manufacturing Policy (MDMP) in June 2023 has further added to the uncertainty. However, the government is working on a new policy, the Mobile Device Manufacturing and Export Policy (MDMEP) 2024-27, which aims to address these issues and promote the growth of the sector.
The MDMEP 2024-27 is expected to focus on three key areas: sustainability, localization, and export promotion. The policy will encourage the use of locally manufactured components and promote exports of mobile devices.
Currently, around 93% of mobile handsets sold in Pakistan are assembled locally. However, the sector still faces challenges, and a comprehensive policy framework is crucial to its long-term growth.
Industry stakeholders are calling for the inclusion of a wider range of electronic devices, such as smartwatches, tablets, and laptops, in the new policy. This would help diversify the sector and create new opportunities for local manufacturers.
