Pakistan is set to lose the second smartphone export order after completing its first export cargo about 14 months ago, primarily because of policy difficulties that have hampered the nation’s export potential and prevented the entry of international competitors as well, according to industry insiders.
Mobile phone manufacturers complained in a letter to the Ministry of IT and Telecom that they were unable to even fulfill local demand because of the limitations on the opening of letters of credit (LCs).
After receiving a 120,000-unit order from the UAE, the first shipment of 4G cellphones was sent in August of last year. However, the same company claims that the SBP’s import restrictions have made it extremely impossible to meet the target.
Inovi Telecom CEO Zeeshan Mian Noor said, “Though we were all extremely delighted when the first-ever shipment of 5,500 mobile sets marked “Manufactured in Pakistan” was transported to the UAE in August 2021, things have not been good for the mobile manufacturing sector in the past 14 months.
He claimed that because of conflicting rules, local manufacturers of mobile phones had not been able to obtain export orders since August of last year.
The government had pledged to provide us with greater incentives and a 5% export rebate, but Mr. Noor said that this had not happened.
He continued by saying that although a new order had been acquired, its timely fulfillment appeared challenging due to the SBP’s prohibition on the import of vital elements for mobile sets.
He continued by saying that supporting export policies were required but that the local mobile sector produced mid-range sets that might enter markets in the Middle East, Africa, Iraq, Iran, and Afghanistan, among others.
Mr. Noor, who serves as the Pakistan Mobile Phone Manufacturers Association’s deputy chairman, claimed that LCs totaling $83 million were approved against a demand of $150 million.
“When the domestic needs were not being fulfilled how can we export without importing key components,” he added.
Cameras, motherboards, and other essential parts are imported from China, Korea, Japan, the US, and a few European nations.
AirLink, Xiaomi’s local partner and the third-largest participant in the global mobile market, was dealing with a comparable scenario at the same time.
According to AirLink Communication CEO Muzzaffar Hayat Piracha, “$674m has been arrested by Indian authorities belonging to Xiaomi India, which is a wholly owned subsidiary of Xiaomi based in China, on charges of tax evasion and other financial irregularities.”
They wish to lessen their presence in India and move their export business to Pakistan, but Mr. Piracha indicated that nothing could be done because of political concerns in Pakistan.