Pakistan seeks smartphone export hub through the proposed collaboration of Samsung, as the federal government has extended an invitation to the South Korean electronics giant to use the country as a regional platform for making mobile phones and exporting them. The government has assured facilitation in exports, value addition, and industrial investments.

Invitation from the Commerce Minister

The federal commerce minister, Jam Kamal Khan, made the invitation in the course of discussions with a delegation of the Country Head of Samsung Pakistan at the Ministry of Commerce. According to the official press release, senior officials of the ministry were also present in the discussions.

Smartphone export hub of smartphones from Pakistan as its future strategy in the market, Khan urged Samsung to go beyond the national market boundaries and start exporting Pakistani-made smartphones to developing countries such as Africa and others. The suggestion of the minister was that Pakistan utilize its manufacturing prowess to enter into international supply chains rather than manufacturing just for itself.

Refurbishment Industry Receives Government Backing

Samsung’s plan to set up mobile phone refurbishing centers in Pakistan was also greeted with enthusiasm by Khan. He pointed out that setting up such an industry will help develop the local industry, will open up export avenues for professional refurbishing centers, will create jobs, and will help build technical expertise in the industry. The plan of refurbishing is crucial to Pakistan’s plans of becoming a smartphone export center.

Samsung Raises Issues of Tariffs

During the discussion, the Samsung team informed the Minister about the progress made by Samsung in the mobile phone assembly industry in Pakistan and shared the investment the company had already made in the process of local assembly of the phones. But the team also pointed out certain issues regarding the new tax regime.

Samsung team raised the issue of reduction in the difference in tariffs between the SKD and CBU category, saying that it made the locally assembled mobile phones less competitive than before.

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Issues Related to Used Phones Import

In addition, the delegation has highlighted the issue related to the import of used cellphones for commercial purposes. The reason for bringing up this issue is that although Pakistan has enough production capabilities, still it is hampering its local manufacturing due to which it faces issues when it wants to become an export hub in the future.

As a solution to this problem, Samsung has suggested importing certified refurbished phones rather than commercial used cellphones. Under this proposal, the original equipment manufacturer will be able to set up its authorized refurbishing center in Pakistan.

Policy Direction: Minister's Rebuttal

In response to these suggestions, Khan admitted that there have been great advancements in the country's cellular telephones sector in the past few years. According to him, future policies need to emphasize genuine manufacturing, value addition, technology transfer, and exports instead of depending on the importation of used goods.

Talking about the taxation matter particularly, Khan added that it will be looked at from the financial perspective in general and also said that any incentive offered to this sector will depend upon investments, localization, exports, and value addition.

Policy Development Next Steps

Mr. Khan has asked the industry stakeholders to prepare well-defined proposals pertaining to certification of refurbishing, export opportunities, investments, and international benchmarks. These proposals will facilitate the development of the new Mobile Device Manufacturing Policy.

It is also emphasized that any decision about commercial import of second hand mobile phones would be based on facts, phased in nature and would ensure availability of locally certified refurbished options. This will ensure consumer interest is safeguarded during the process.

In line with its commitment to industrialization, he stated that Pakistan presented many possibilities to international firms of technology. Khan was hopeful that working together with well-known producers, such as Samsung, will contribute greatly to creating jobs, investments, and increased exports in the field.

With aspirations of becoming a hub for exporting smartphones, this meeting comes amid the larger context of the Pakistani government’s interaction with major producers of electronics, as seen in the previous attempts to lure foreign firms, such as Apple, to make similar investments under the Mobile & Electronic Devices Manufacturing Policy of Pakistan.