Pakistan targets 50 percent local value in phones, up from an estimated 10 to 20 percent

Pakistani plants keep an estimated 10 to 20 percent of each handset's value at home, and the Ministry of Industries and Production wants that share to reach as much as 50 percent. The gap is wide even though local plants already supply almost nine in every ten new handsets sold.

The ministry is evaluating a new Mobile Device Manufacturing Policy to follow the 2020 to 2023 policy, according to an official document described in reports published on 30 October. It aims for up to 50 percent domestic value addition, reached progressively, through local component production, technology transfer and supporting industries. No draft text has been released, and no timeline, incentives or duty changes have been given.

An earlier draft Mobile and Electronics Manufacturing Policy for 2026 to 2030 had set a target of making up to half of phone components locally within five to eight years, with $700 million in device exports and 50,000 more skilled workers. It was to be launched after IMF approval. Whether the new policy is that draft or a replacement has not been stated.

What the output figures show

Local plants assembled 20.08 million handsets from January to September, against 2.85 million commercial imports. Roughly 8 million were smartphones and 12 million were 2G phones. Local assembly therefore supplied 87.6 percent of new handsets, and about 60 percent of the units made were 2G phones.

The January to August totals were 18.66 million assembled and 2.74 million imported. Subtracting gives September output of about 1.42 million handsets and about 110,000 imports. Because the totals are rounded to the nearest 10,000, those September figures carry an error of that size.

Our analysis: what 50 percent would take

The arithmetic is plain. At 10 to 20 percent local value, Rs80 to Rs90 of every Rs100 of factory value is imported. Reaching 50 percent means creating two and a half to five times as much value inside Pakistan on each handset.

The magazine's view is that the target can be reached only in layers. The processor, memory and display usually make up the largest share of a phone's cost, and a few foreign firms supply them, so Pakistani plants are unlikely to replace them soon. The realistic gains are in circuit board assembly, batteries, chargers, casings and packaging, which are lower in value but can be built at scale. Scale is the weak point: with 60 percent of units being 2G phones, the production base is low priced handsets. If a local content rule follows, component makers would stand to gain, while assemblers that depend on imported kits would carry the cost. The words "up to" matter too, because they set a ceiling, not a requirement.

The first real test is the policy text itself. Its duty structure and deadlines, once published, will show whether 50 percent is a rule or an aspiration.