Samsung has finally begun production of mobile phones in Pakistan, bringing the hope of lower import costs to the country. A delegation led by Minister Faisal Subzwari recently visited Samsung’s production facility in Karachi. They met with Samsung’s top managers and discussed the challenges facing the Pakistani market. The delegation was also tasked with promoting the local industry. They also discussed the benefits of a made in Pakistan phone.
Importation of CKD or SKD kits
The Pakistani mobile handset market is the eighth largest in the world, and the country imports roughly 16.3 million units a year. Of that total, 13 million are manufactured domestically, and the remaining phones are imported. The industry is worried that the FBR’s decision to lower import duties will harm the country’s mobile handset industry. Tania Aidrus, an advisor to Prime Minister Imran Khan’s Digital Pakistan Initiative, wants to increase local production and availability of phones. This will help save billions of dollars in foreign exchange for the country.
The mobile phone industry is considered an important strategic sector for the country, and can create employment opportunities for over 200,000 Pakistanis. Infinix is the leading smartphone brand in the country, and the company is introducing a CKD or SKD kit to enable it to be manufactured locally. The company plans to start production in March-April, and eventually aim to produce one million units per month.
Duty on parts
The government’s decision to levy a four percent withholding tax on locally manufactured mobile phones has been criticized by the local mobile phone industry. The move could lead to the closure of existing manufacturing units, as well as discourage additional investments in production facilities. It will also put Pakistan’s IT manufacturing industry at a disadvantage. Mobile phone dealers have urged the government to reconsider the decision and allow for a zero duty on locally manufactured mobile phones.
Imports of mobile phones into Pakistan can be classified under three categories: fully built units, semi knocked down kits, and assembled parts. Complete knocked-down mobile phone parts require a complete assembly process. Importing parts into Pakistan is possible if the phone owner assembles them themselves. Alternatively, importing a phone is allowed only if the device is used for personal use. If you are importing a mobile phone for personal use, you must declare it in a customs declaration form and validate the information online. The WEBOC system will determine the duty on mobile phone handsets and generate an electronic Payment Slip ID for you to pay. You can pay electronically through your online or mobile banking account or by ATM transfer. Most major Pakistani banks accept online and mobile banking. After you have made an electronic payment, your device will be whitelisted in D
Importation of complete mobile devices
The government plans to export locally assembled mobile phones to the international market. As of now, Pakistan manufactures low-end phones. To attract more investment in the field of mobile phone manufacturing, the government should focus on attracting big Chinese and Korean players. The government also needs to develop the right infrastructure to attract these industry players. Importation of complete mobile devices made in Pakistan is expected to grow by a factor of eight this year.
In the last twelve months, Pakistan imported 16.3 million complete mobile devices, including semi knocked-down devices, totaling $1,874 million. The prices were consistent across brands, with Samsung phones selling for about $180-$209 and iPhones for $776. Nevertheless, some of these phones are second-hand sets. This makes it difficult to judge the quality of Pakistan-made devices.
Exports of made in pakistan phones
The rise in exports of made in Pakistan phones is good news for the country’s economy. It would help Pakistan close its trade deficit and attract foreign investment. It would also boost employment rates. The Chinese mobile phone manufacturer Xiaomi is planning to manufacture 2.5 to 3 million units in Pakistan. Its plans will be a boon to the local industry and the country’s economy. However, exports of made in Pakistan phones could be a challenge to local producers.
The federal government of Pakistan has granted licenses to several mobile phone manufacturers to begin producing and exporting smartphones. These include Samsung, Vivo, Oppo, Airlink, Transsion, Inovi, Tecno, and G-five. The companies are allowed to manufacture and export 2G and 3G smartphones. Their products are affordable and feature the latest technologies. These phones are also available at lower prices than their counterparts in China.
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