Once the sales tax on Local Assembly Of Mobile is abolished for mobile phones under the ‘above $200’ value category, Samsung and Oppo will reportedly begin assembling mobile phones in Pakistan.
By Syeda Masooma
The removal of said tax is expected to take place soon, as the Economic Coordination Committee (ECC) has already approved the “Mobile Device Manufacturing Policy, 2020” in May last year. By June 2020, the decision was also ratified by the Cabinet.
This new policy offers ample advantage for local manufacturing and assembling of mobile phones compared to importing mobile phones in completely built condition, primarily for below $200 categories.
Now it has been reported that two internationally renowned brands, Samsung and Oppo, are also ready to bring assembling operations to Pakistan as soon as the new policy gets approved and implemented.
Several companies have already shown interest in starting manufacturing and assembling in Pakistan, while some have already started their trial productions in the country.
Three companies – VIVO, Airlink Communications, and Inovi Telecom – have already begun local operations since February 2021. These three have a combined capacity of more than one million mobile phones per month.
With all these new players entering and already operating, in Pakistan, the local production will be able to meet a significant portion of demand, which was estimated to be approximately 3.6 million mobile phones per month in 2020.
Some local players that offer assembling services to foreign mobile phone manufacturers have also enhanced their assembling capacity. The Karachi-based company Transsion Tecno, which offers assembly services to foreign mobile phone manufacturers, including Itel, Infinix, and Tecno, has increased its local assembly from 150,000 units per month to 650,000 units per month. Such capacity expansions have resulted from the hike in demand for mobile phones since the launch of the new policy.
Other already established mobile phone companies in Pakistan, such as G-Five and Q mobile, are also working on increasing their production capacity. They are also moving from a 2G non-android market towards 4G smartphones, especially since the boost in local manufacturing and assembly has paved the way for higher demand for smartphones in the country.
The policy in concern offers a 3 percent export rebate for the local companies to enter the export market as well, thereby not only making local assembly more lucrative for investors but also the export of mobile phones from Pakistan a viable business opportunity.
Gauging the success in the local market with increased demand as a result of the policy announcement, the industry players are also optimistic about the export of locally assembled mobile phones.
This policy is expected not only to expand the range of products and keep the prices under control for local customers of mobile phones, but it will also likely expand the mobile phone industry to become bigger than the country’s automotive industry in a few years. Moreover, this growth will also result in the creation of numerous employment opportunities within the industry as well as associated industries.
Work has already begun with respect to associated industries and related products, including the electronic sector. The preparation of an appropriate framework for local assembly of tablets, allied equipment, and mobile accessories is already underway to improve the entire ecosystem.
Originally published at Pro Pakistani