In a significant achievement, local mobile assembly and manufacturers in Pakistan have collectively produced 13.8 million mobile phones during the first five months of the ongoing fiscal year (January-May 2024), according to recent data released by the Pakistan Telecommunication Authority (PTA).
While the country has made strides in local production, commercial imports of mobile phones have dwindled to a mere 0.75 million units during the same period.
The PTA’s data breakdown reveals that out of the total 13.8 million devices produced, 8.1 million were smartphones, while the remaining 4.98 million were 2G devices.
Among the brands, Infinix led the production charts with 1.46 million units manufactured from January to April 2024. Itel and VGO TEL followed, with outputs of 1.29 million and 1.14 million units, respectively.
This growth in local production comes despite a declining trend since 2022, attributed to the country’s economic depression and rising interest rates, which have constrained the local industry.
Moreover, commercial imports have seen a sharp decline from 24.66 million units in 2021 to just 1.58 million units in 2023, indicating a heavier reliance on domestic production to meet local demand.
The significant drop in imports is largely due to the central bank’s import restrictions aimed at curbing the trade deficit and reducing the outflow of foreign currency.
With the expanding reach of internet services, the proportion of smartphone users on Pakistan’s network has risen to 61 per cent, up from 59 per cent in 2023 and 56 per cent in 2022. Conversely, the use of 2G devices has decreased to 39 per cent, compared to 41 per cent in 2023 and 44 per cent in 2022.
The recently announced budget for the upcoming fiscal year (FY25) sets a standard rate of 18 per cent on mobile phones, while devices valued at more than $500 will continue to be taxed at the existing rate of 25 per cent.
Additionally, the government has proposed increasing the withholding tax rate from 15 per cent to 75 per cent for individuals listed in the income tax general order for non-filing of returns despite receiving notices.
These measures reflect the government’s efforts to bolster local production and reduce dependency on imports, thereby supporting the domestic mobile phone manufacturing industry.
