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Federal cabinet gives the nod to Pakistan’s first mobile manufacturing policy

Federal cabinet gives the nod to Pakistan’s first mobile manufacturing policy

Experts believe that Pakistan can manufacture 40 million phones annually

The federal cabinet approved Pakistan’s first-ever Mobile Device Manufacturing Policy (MDMP), after its initial approval by the Economic Coordination Committee (ECC) last month. The policy was chalked out by the Engineering Development Board (EDB), which is a part of the Ministry of Industries and Production, in consultation with the mobile manufacturers.

One of the reasons behind the approval of the policy is the concern related to the import of cell phones manufactured in India. Such phones may be fitted with equipment that can transfer the data without users’ knowledge.

“The country faces a serious security threat as there is a growing concern of Indian-manufactured smartphones using other countries’ Type Allocation Code within the initial eight-digit portion of the 15-digit International Mobile Equipment Identity (IMEI) used to uniquely identify wireless devices,” a statement from the ministry of technology read.

It will also help boost the local cellular phone industry and create many jobs all over the country. Currently, several local manufacturers mostly manufacture 2G technology phones. With support from the government, they will be able to manufacture phones with the latest technology.

It will also encourage the big international players to set up their manufacturing units in Pakistan as well. It can boost the foreign exchange of the country since products for international markets may also be manufactured in Pakistan.

The government will not require a 4% withholding tax on the locally manufactured and assembled cell phones. The policy also includes the removal of fixed income tax on CKD/SKD manufacturing of mobile devices up to $350. It, however, increased the fixed income tax on the $351-500 category by 2,000 rupees, and 6,300 rupees on the $500 category.

Experts believe that Pakistan can manufacture 40 million cell phones annually. Industry insiders, however, have guarded optimism about the policy and feel that the final results will depend on how the policy is implemented.  

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