It has been a good couple of years for domestic mobile manufacturing.
Based on import figures, the size of the pie is around $2.5-2.7 billion. Stakeholders agree that good sound policies have been introduced to encourage domestic production while introducing tariffs that make imports non-viable.
But, there is always a ‘but’. “There are rumours that a new GST on mobile phones will be imposed in the mini-budget,” says a source in the know. “If a new GST is implemented, the price will be higher affecting consumer buying power. As a vendor investing in the factory set up, this affects our feasibility.”
The age-old woe of lack of consistency of policy had him nervous. “If you are planning a new policy, it needs to be locked for a definite period in terms of duties and taxes. The more confident the investors are, the more likely that foreign direct investment will flow in,” he said, emphasising the importance of a consensual approach for policies.
China factor
Pakistan imported $1.12bn worth of cell phones from China last year, less than a drop in its ocean of exports of $126bn. However, according to a document of the ministry of industries and production, an average Chinese assembly line worker now costs around $700 per month. Higher labour costs and tensions with the US has mobile manufacturing shift to regional countries, of which Pakistan hopes to one day be a front runner.
About 65-70pc of the population is still using feature phones but smartphone penetration may cross...
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