Pakistan's Mobile Device Manufacturing Policy has drawn more than 35 global handset makers but failed to deepen local production, with value addition stuck at 10-15 per cent, industry sources said. Launched in 2020, the policy aimed first to attract mobile phone assembly and then to localise parts and components, including motherboards and displays, to make the industry competitive for exports.
The first phase delivered positive outcomes. According to the Pakistan Telecommunication Authority (PTA), more than 35 manufacturers, among them Samsung, Xiaomi, OPPO, Vivo, Transsion and Nokia, set up plants in the country, creating about 40,000 jobs.
Industry sources attributed the limited localisation to the government's failure to follow through on the policy's roadmap and to a reverse-cascading tariff structure. Under the current regime, components such as chargers, batteries, cables and motherboards imported as part of a completely knocked-down (CKD) kit attract zero per cent customs duty.
Raw materials and intermediate inputs needed to make the same components locally attract duties of 20-30 per cent. Sources said this inversion makes local manufacturing economically unviable, despite the industry's willingness to invest.
India, by contrast, has built a deeper ecosystem since 2017 by encouraging component production as well as assembly. It levies higher duties on imported finished components, such as chargers, batteries and motherboards, while keeping tariffs low on the inputs needed to make them domestically.
India's local value addition in mobile phones now stands at about 20 per cent. More than 400 Indian companies now produce various mobile phone components, reducing reliance on imported content.
Substantial incentives for major manufacturers, including Apple and Samsung, have also helped expand capacity and exports. Indian mobile phone exports exceeded $30 billion last year, backed by incentives of 10-12 per cent under the Production Linked Incentive (PLI) scheme and export rebates.