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The domestic mobile phone industry is eagerly awaiting the Mobile Device Manufacturing Policy (MDMP) which has been under preparation for over one year.

Official sources told Business Recorder that the draft policy which was prepared in the light of the guidelines of the then prime minister's advisor on industries and production is now lying on the table of the newly appointed Minister for Industries and Production, Hammad Azhar.

A meeting is scheduled on Thursday (today) to discuss the pros and cons of the draft policy for submission to the federal cabinet.

Currently, there are over 20 manufacturers of mobile phones in Pakistan providing direct employment to over 15,000 workers.

The sources said one joint venture company with Chinese investment and technical expertise has been set up in Karachi to produce smart phones with a capacity of 3 million units per year. In anticipation of the long-awaited policy, this joint venture is now expanding their capacity to 13 million handsets per year with plans to export the surplus quantity to the African market.

Other manufacturers, who are manufacturing 2G phones, are waiting for a long-term policy from the government to upgrade their facilities to smart phone manufacturing.

"Starting from local assembly, the industry anticipates to localize several components from packaging, chargers, hands-free, plastic and parts, and ultimately to start the local assembly of motherboards. This is expected to create local value addition of around 49 percent in 3 years creating over 200,000 direct and indirect jobs in this sector," said an official.

Chinese mobile phone manufacturers are actively looking to create an overseas base to produce their products especially after the COVID19 experience. India and Bangladesh are actively pursuing Chinese investment while Pakistan lags behind due to long delay in formulation of a long-term policy to manufacture handsets for domestic and export markets.

Pakistan is the seventh largest market for mobile phones with annual sales of 34 million in 2019. With increasing demand and competitive advantage of labour costs, it can develop into a major industry capable of generating an export surplus to sell its brand of "Made in Pakistan" in the international market.

The main purpose of the policy is to make the engineering sector one of the largest export-oriented sectors of Pakistan.

This implies that if the export of the textile sector crosses the $12 billion benchmark within the next 8 to 10 years then the cell phone industry could contribute $500 million to $1 billion in the export of engineering goods.

Copyright Business Recorder, 2020

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