According to a local newspaper Nokia, Huawei, and Samsung wish to start manufacturing phones in Pakistan. Well informed sources in EBD told the newspaper that the companies want to start manufacturing in Pakistan because the labor wage here is lower than China.
High Labor Cost in China
Labor pay for the unskilled in China is CNY 5,000 (Pkr 105,000). For technical workforce, the labor pay is CNY 20,000 (PKR 420,000). The companies now want to manufacture their cell phones here in Pakistan because labor and skilled workforce can be hired here at a very low wage.
Mobile manufacturing plants cost is Rs. 2 billion. This was disclosed at a meeting of Pakistan Mobile Manufacturers and FBR, Ministry of information technology and telecommunication, PTA and EDB held on Jan 31, 2019.
Director of PTA informed that due to IMEI registration the local manufacturing of mobile devices has increased.
Importing Semi knock down units
He recommended that the MoI&P, in coordination with relevant stakeholders should also formulate a policy to encourage local production of mobile devices. Semi Knock Down (SKD) assembly shall be encouraged with the help of tariff-based incentives.
However, benefits that are offered to SKD assembly must have a cap limit i.e. 22 months. He further said that incentives should be given to 3G/4G mobile devices.
Currently phone assembling companies
There are a total of 23 companies that are assembling cell phones in Pakistan at this time. Out of these 23 companies, 15 are in Azad Jammu Kashmir. These companies are in AJK due to tax holiday offered to AJK.
Tax slabs should be formulated according to manufacturing and classification of the industry”. -Mansoor khan.
FBR said that the government has announced amendments to encourage CKD-based production and on the import of cell phones in SKD and CBU form.
Work on Policy
Asim Ayaz, DGM-incharge policy, revealed that EDB policy team is working on a Mobile Phone Policy. He said that he is hoping that soon Pakistan will see similar success as the automobile sector.
After a brief discussion, the meeting concluded that EDB will liaise with local producers for preparation of draft mobile device policy to encourage local manufacturing of mobile devices initially as SKD assembly and later as CKD assembly operations. In this regard, the industry will submit its proposals to EDB.