Pakistan Plans 5% Levy on Mobile Imports, Boosts Local Manufacturing but Raises Cost Concerns

The government is considering imposing a levy of up to 5% on the import of mobile phones and electronic devices under a proposed Mobile and Electronic Device Manufacturing Policy for 2026–33, as part of a broader effort to accelerate localisation and reduce reliance on imports.

According to official documents, the proposed levy is expected to generate $368 million over the seven-year policy period. The revenue would be used to support local manufacturing, capacity building, and export-oriented production of electronic devices.

Policy Nears Prime Minister’s Approval

The Mobile and Electronic Device Manufacturing Policy has been finalised and is awaiting presentation to the prime minister. The proposal was discussed at a high-level meeting chaired by Special Assistant to the Prime Minister (SAPM) Haroon Akhtar Khan.

The meeting was attended by Secretary Industries and Production Saif Anjum, Engineering Development Board (EDB) Chief Executive Officer Hammad Mansoor, and representatives of mobile phone manufacturers.

Officials said the policy was developed after extensive consultations with stakeholders and is intended to build on the gains achieved under earlier localisation initiatives.

Shift from Assembly to Full Manufacturing

Addressing the meeting, SAPM Haroon Akhtar Khan said the new policy represents a strategic shift from basic assembly operations to full-scale manufacturing. The policy covers mobile phones, laptops, and other electronic devices, making it a broad-based industrial framework.

He said international brands would be encouraged to manufacture devices in Pakistan, while local manufacturers would be supported in expanding their production capabilities. The policy also outlines phase-wise manufacturing targets and clear timelines.

According to the Engineering Development Board, the policy aims to achieve 50% localisation in mobile phone manufacturing by 2033. It also targets 70% recovery of electronic waste through organised systems and plans to train 50,000 skilled workers, including 15,000 specialised professionals.

Progress Under the Previous Policy

Pakistan’s mobile phone manufacturing sector has expanded rapidly in recent years. Under the previous policy, the Pakistan Telecommunication Authority (PTA) issued 37 licences for local assembly, leading to production growth from just 0.1 million units in 2019 to 30.1 million units.

PTA projections for 2025 show that around 93% of domestic demand was met through local production, while mobile phone imports fell sharply from 16 million units in 2019 to 2.04 million units in 2025.

The sector has also attracted $250–300 million in investment and generated between 50,000 and 60,000 direct and indirect jobs. Pakistan has exported around 230,000 mobile phones to the United Arab Emirates and Gulf Cooperation Council (GCC) countries.

What the Levy Means for Consumers

Despite these gains, the proposed levy is expected to have a direct impact on consumers, particularly those purchasing imported smartphones.

Mobile phones in Pakistan already face relatively high taxes, and an additional levy of up to 5% could further increase retail prices. Industry analysts say the impact will be most visible in the premium segment, where devices are almost entirely imported rather than locally manufactured.

At present, Pakistan’s local manufacturing ecosystem is largely concentrated on entry-level and mid-range smartphones, dominated by Chinese brands. High-end devices, including Apple’s iPhone, Samsung’s flagship Galaxy models, and other premium smartphones,  are not manufactured locally and depend on imports.

As a result, consumers who prefer high-end, non-Chinese smartphones are likely to face higher prices if the levy is implemented. Observers warn that this could further limit access to premium devices in a market already strained by inflation and currency depreciation.

There are also concerns that without parallel incentives to attract advanced manufacturing or flagship device production, the policy may raise costs for consumers without offering comparable local alternatives in the high-end segment.

While the government maintains that the levy will help fund long-term industrial growth and job creation, its immediate impact is expected to be felt at the retail level. Industry stakeholders say clearer guidance will be needed on whether exemptions, phased implementation, or consumer protections will be considered for devices that are not produced locally.

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