ISLAMABAD: After Pakistan made its first-ever export shipment about 14 months ago, Pakistan is likely to lose the second smartphone export order mainly due to political issues that have hampered the country’s export potential and also limited the entry of global players, industry players say.
In a letter to the Ministry of IT and Telecoms, mobile phone manufacturers have indicated that they have not even been able to meet local demand due to restrictions on opening letters of credit (LCs).
The first export shipment of 4G smartphones came in August last year after receiving an order from the United Arab Emirates (UAE) for 120,000 units, but the same company claims State Bank of Pakistan’s (SBP) import restrictions have made it extreme would have difficulty in reaching the goal.
“We were all very happy when the first-ever shipment of 5,500 cellphones labeled ‘Made in Pakistan’ were shipped to the UAE in August 2021, but the last 14 months have not been good for the cellphone manufacturing sector,” he told Zeeshan Mian Noor, CEO of Inovi Telecom.
He said local handset makers have been unable to secure export orders since August last year because of inconsistent policies.
“We were promised higher incentives and a five percent export rebate, but those promises have not been fulfilled by the government,” Noor said.
He added that a new order has been secured, but its timely completion seems difficult as the SBP has not allowed the import of the key components for mobile devices.
He added that the local mobile phone industry produces medium-sized devices and they can penetrate the markets of Middle East, Africa, Iraq, Iran and Afghanistan etc., but supportive export policy is needed.
Mr Noor, who is also vice chairman of the Pakistan Mobile Phone Manufacturers Association, said $83 million in LCs were approved against the $150 million demand.
“If domestic demand is not met, how can we export without importing key components,” he added.
The key components like cameras, motherboards, technical equipments, etc. are imported from China, Korea, Japan, USA and some European countries.
At the same time, AirLink, the local partner of Xiaomi, the third largest player in the global mobile market, faced a similar situation.
An amount of “$674 million has been arrested by Indian authorities from Xiaomi India, a wholly owned subsidiary of Xiaomi based in China, for tax evasion and other financial fraud,” said Muzzaffar Hayat Piracha, CEO of AirLink Communication.
“They want to reduce their presence in India and shift export business to Pakistan, but there is nothing we can do as there have been political problems in Pakistan,” Mr Piracha said.
Published in Dawn, October 19, 2022