The whole purpose of import restrictions and raised taxes was to encourage local production and healthier exports, but it is proving to be counterproductive in several cases. Pakistan’s mobile phone exports are likely to be hindered no thanks to government policies that have been a barrier to the country’s export potential.
Mobile phone manufacturers in Pakistan informed the Ministry of IT and Telecom of the restrictions on obtaining letters of credit (LCs), which is barring them from meeting the local demand for phones, let alone exporting them.
These LCs are required to import the components that can’t be made locally and are used for mobile phone manufacturing.
These key components include cameras, motherboards, and other technical equipment that is generally exported from the US, China, Korea, Japan, and some European countries.
The first export of 4G mobile phones was made in August last year after an order was secured from the United Arab Emirates (UAE) for 120,000 units. The same company responsible for this order now says that achieving this target has become increasingly difficult due to import restrictions imposed by The State Bank of Pakistan (SBP).
Inovi Telecom CEO Zeeshan Mian Noor said:
We were all very happy when the first-ever shipment of 5,500 mobile sets tagged ‘Manufactured in Pakistan’ was sent to the UAE in August 2021, but things have not been good for the mobile manufacturing sector in the past 14 months.
He added that local mobile phone makers have been unable to secure export orders since August last year due to these inconsistent policies.
We have been promised higher incentives and a five per cent export rebate but these assurances have not been fulfilled by the government.
The CEO said that LCs worth only $83 million were granted rather than the original demand of $150 million.