Pakistan Considers 5% Levy on Imported Mobile Phones to Boost Local Manufacturing

Pakistan is moving toward a major shift in its electronics industry, proposing a levy of up to 5% on imported mobile phones and electronic devices. This move comes under the draft Mobile and Electronic Device Manufacturing Policy 2026–33, aiming to strengthen local production, reduce import dependency, and boost the country’s industrial capacity. Officials estimate the levy could generate $368 million over seven years, funds earmarked to support local manufacturing, skill development, and export-focused production.

The draft policy is now finalized and awaiting submission to the Prime Minister. It was recently reviewed in a high-level meeting chaired by Special Assistant to the Prime Minister (SAPM) Haroon Akhtar Khan. Key attendees included Secretary of Industries and Production Saif Anjum, Engineering Development Board CEO Hammad Mansoor, and representatives from mobile phone manufacturers.

Officials said the policy reflects extensive consultations with industry stakeholders. It builds on gains from previous localization efforts while establishing a roadmap for full-scale electronics manufacturing.

From Assembly to Full Manufacturing

SAPM Haroon Akhtar Khan emphasized that the policy represents a strategic shift from basic assembly to full-fledged manufacturing.

Key points include:

• Coverage extends to mobile phones, laptops, and other electronic devices.
• International brands will be encouraged to manufacture in Pakistan.
• Local manufacturers will receive support to expand production capabilities.
• Phase-wise manufacturing targets and timelines are clearly defined.

The Engineering Development Board aims for 50% localization in mobile phone production by 2033. Additionally, the policy plans to recover 70% of electronic waste through organized systems and train 50,000 skilled workers, including 15,000 specialists.

Growth Under the Previous Policy

Pakistan’s mobile manufacturing sector has surged in recent years. Key achievements include:

• The PTA issued 37 local assembly licenses, increasing production from 0.1 million units in 2019 to 30.1 million units.
• By 2025, local production is projected to meet 93% of domestic demand.
• Mobile phone imports dropped from 16 million units in 2019 to 2.04 million in 2025.
• The sector attracted $250–300 million in investment and created 50,000–60,000 direct and indirect jobs.
• Around 230,000 phones were exported to the UAE and GCC markets.

Consumer Impact of the Proposed Levy

While the policy supports long-term industrial growth, the levy could directly affect consumers, particularly for imported smartphones.

Considerations include:

• Pakistan already imposes high taxes on mobile phones; an additional 5% could raise retail prices further.
• Premium smartphones, including Apple iPhones and Samsung Galaxy models, rely entirely on imports.
• Local production mainly focuses on entry-level and mid-range devices, dominated by Chinese brands.
• Consumers of high-end non-Chinese phones may face steeper prices.

Experts warn that without incentives for flagship or advanced manufacturing, the levy might raise costs without offering premium alternatives locally. The government insists the revenue will fund industrial growth and job creation, but retail consumers are expected to feel the immediate effects.

Industry stakeholders also highlight the need for clear guidance on exemptions, phased implementation, or protections for devices not produced locally.