Pakistan is now assembling almost all global brands of mobile phones locally, increasing the ‘Made in Pakistan’ production to 95% of the local demand. As a result, the share of imported finished mobile phones has reduced to merely 5%. This shift to local assembly is saving around 15-20% in foreign exchange, despite local assemblers still importing almost all mobile phone parts from foreign manufacturers.
According to a comprehensive report based on Pakistan Telecommunication Authority’s (PTA) data, titled ‘Pakistan Market – Local Manufacturing/Assembly of Mobile Phones up 55% year-on-year in May 2024,’ Topline Research Deputy Director Sunny Kumar highlighted the dramatic growth in local assembly. In 2016, only 1% (0.29 million units) of mobile phones were assembled locally in Pakistan, with 99% (21.36 million units) being imported.
“However, during January-May 2024, Pakistan imported only 5% (0.75 million units) of its mobile phones, while local manufacturing/assembly accounted for 95% (13.08 million units),” Kumar noted. Idrees Memon, former chairman of the Karachi Electronic Dealers Association, added that Pakistan had also started exporting a notable quantity of ‘Made in Pakistan’ phones, primarily to Middle Eastern countries. “The imposition of an 18% sales tax on phones in the budget for 2024-25 (effective July 1, 2024) is anticipated to hamper exports,” he added.
Memon, also a former president of the Karachi Chamber of Commerce and Industry (KCCI), confirmed that except for Apple, almost all global brands (mainly Chinese) are being locally assembled. The local production is saving “some 70% in foreign exchange,” he estimated, adding that duty on importing mobile phone kits is nominal at Rs3,000-5,000 per unit compared to an average duty of Rs30,000 on finished units – saving up to 90% in taxes for local assemblers.
He noted that 18-20 companies are manufacturing branded phones under significant setups in Pakistan. Many more companies are involved in local assembly, providing direct and indirect employment to hundreds of thousands of people in the country.
The demand for phones has surged significantly post-Covid-19 in Pakistan, as many people switched to digital solutions using smartphones. Consequently, the value of phone imports in US dollars increased threefold in the outgoing fiscal year compared to the previous year.
According to Pakistan Bureau of Statistics (PBS) data, the import of mobile phones (CKD/CBU) surged 214% to $1.62 billion in the first 10 months of FY24 compared to $516.5 million in the same period of the previous year.
Topline Research’s Kumar further said that local mobile companies manufactured/assembled 2.23 million units (up 55% year-on-year) in May 2024. This brings total local production to 13.1 million units in the first five months of 2024, soaring by 168% compared to the same period of the previous year.
This improvement is mainly led by import restrictions last year coupled with gradual economic recovery. Pakistan now fulfills 95% of its mobile phone demand through local manufacturing/assembly, compared to a 5-year (2019-2023) average of 67% and an 8-year (2016-2023) average of 47%.
“All mobile brands except iPhone are now being manufactured/assembled in Pakistan,” Kumar stated.
Over the past three years, Pakistan has undergone a significant shift from importing mobile phones to local manufacturing and assembly. This transformation followed the government’s announcement of a local mobile manufacturing policy in 2020, aimed at encouraging international mobile players to establish assembly plants in Pakistan.
The shift towards locally manufactured/assembled mobile phones is also driven by their affordability, “offering a price gap of 15-20% compared to imported mobile phones of the same build quality.”
Within the locally assembled mobile phones of 13.08 million units during the first five months of 2024, 62% (8.1 million units) are smartphones, while the remaining 38% (4.98 million units) are 2G phones.
