ISLAMABAD:
American tech giant Apple is set to start manufacturing iPhones in Pakistan after the government has agreed to offer incentives in the proposed Mobile and Electronics Manufacturing Framework.
Apple has also agreed to refurbish iPhones in Pakistan for re-export under the new framework. The government expects $100 million from the re-export of refurbished iPhones in the first year.
Apple management has asked for the provision of land at discounted rates, 8% performance incentive and plans to repair two to three-year-old iPhones.
“We have included these three conditions in the new proposed Mobile and Electronics Manufacturing Framework to be approved by Prime Minister Shehbaz Sharif,” Engineering Development Board (EDB) Chief Executive Officer Hamad Ali Mansoor told The Express Tribune in an interview.
He said that Apple had stepped in Indonesia, Malaysia and India with the same model, where it started repairing two to three-year-old iPhones initially aimed at training the local manpower and later began manufacturing those phones.
The government is already giving a 6% performance incentive to the existing mobile phone manufacturers. However, it is going to be increased to 8% to attract Apple and other global manufacturers.
He added that Special Assistant to Prime Minister on Industries and Production Haroon Akhtar Khan and secretary industries had extended full support to the new mobile and electronics policy.
“We are also expecting investments of $557 million from Chinese companies in mobile manufacturing,” the EDB CEO said, adding that Memoranda of Understanding (MoUs) had been signed during PM Sharif’s visit to Beijing.
He anticipated that the new policy would also bring investment to the manufacturing of laptops, tablets, watches, trackers and air buds. The government wants to make Pakistan a regional hub of mobile and electronics exports. “The new policy has been framed while looking at this objective,” he remarked.
“We are focusing on localisation of mobile phones and electronics,” Mansoor said, adding that phone manufacturers had assured the government that they would increase the use of local parts up to 35% in the first year, which would later be pushed to 50%. At present, there is 12% localisation in phone manufacturing.
Export levy
The government has planned to impose an export levy of up to 6% in the Mobile and Electronics Manufacturing Framework to generate funds for technology investment. It expects collection of Rs62 billion, which will be used for accelerating localisation in phone manufacturing.
“There will be no export levy on phones costing Rs50,000 to Rs60,000,” the CEO said. The levy will be imposed on phones above Rs100,000.
Cheaper EVs
At present, the government is implementing a policy to provide electric two-wheelers for people at subsidised rates. It has allocated Rs9 billion in the budget to provide a 40% subsidy. Up to 3% tax has been imposed on the gross sale value of conventional local and imported vehicles to roll out the e-bike scheme.
“The government plans to extend the subsidy from electric two-wheelers to four-wheelers,” Mansoor said, revealing that a Lahore-based company was setting up a plant to provide electric four-wheelers like conventional Alto at Rs700,000 to Rs800,000.
“We have collected Rs12 billion in taxes over six months against the target of Rs9 billion to subsidise e-bikes,” he said. Now, there is room to extend the scope of e-bike scheme to four-wheelers.
He added that the government was planning to launch an e-bike scheme for every one instead of selection through balloting in the second phase. “I am focusing on digitisation of the entire auto industry process including certificate issuance to ensure transparency.”