Mobile phone makers push for localisation

Urge govt to control smuggling, implement device manufacturing policy

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KARACHI:

Mobile phone manufacturers have pleaded for implementation of a localisation policy and price reduction while controlling cellphone smuggling to promote the local industry.

There are around 36 local assembling units, which are meeting 95% of demand. It suggests that the local industry has almost taken over the market with the creation of 40,000-50,000 job opportunities. Almost all big brands are working in the country.

When it comes to challenges, the growth in mobile phone sales is less than expected due to poor economic conditions, but demand will pick up soon as the economy is stabilising. If there is growth, demand will rise, pushing up investment and employment.

Pakistan Mobile Phone Manufacturers Association (PMPMA) Vice Chairman Amir Allahwala said, "We are importing parts or accessories. A single smartphone set consists of 70-80 components, which are being locally assembled in various units here. Now, the industry needs localisation that is why we urge the government to reduce duty on raw materials and increase duty on parts of mobile phones."

He elaborated, "If I want to make a charger locally, I will need to import raw material for the charger. The import duty on raw material should come to naught and the import duty on chargers must be 20%. This initiative will boost localisation at the initial stage and Pakistan will be able to produce phone chargers."

He pleaded for implementing the Mobile Device Manufacturing Policy 2020, drawn up by the government under the aegis of the Engineering Development Board (EDB). The policy envisages export initiatives, localisation, incentives, research and development (R&D) allowance, etc. Ensuring a proper tariff structure can make localisation viable.

"If you import chargers, batteries and cables, they come with zero duty, but if you import raw material of these three basic items, 20% to 30% import duty is paid," he said.

"It should be reversed to spur localisation. It means raw material must have zero import duty and the duty on finished products should be raised. There must be a 20-25% gap between import duties on the raw material and finished products."

In short, he said, there must be zero import duty and 18% sales tax on raw material and there should be 20% import duty and 18% sales tax on finished products.

India gives 7-8% export incentives and rebate to the local industry, while there is no export incentive in Pakistan, because of which its exports are negligible. Once the government gives export incentives and implements the localisation policy, it will open up vistas for export and localisation.

Realme spokesperson Asma Hayat called for controlling sales of illegal mobile phone sets and smuggling to promote the local industry and asked for reducing taxes to give price relief to customers. She said the industry is growing gradually.

She said during a media briefing at an event that Realme has officially launched Realme C75, a revolutionary device with unmatched water and dust resistance protection, making it the industry's best waterproof phone, capable of withstanding every wash.

The device features the coveted IP69 rating – unprecedented water and dust resistance, capable of withstanding high-pressure and high-temperature water jets.

She highlighted that the sales volume of Realme hit 150,000 units a month in the country including 40,000 units in Karachi, while various kinds of mobile phone sets are being assembled completely in the country.

Moreover, more than 2.5 million locally assembled mobile phone sets of various brands are being produced every month and there is a demand for over 30 million chargers per annum in the country.