Tech giant Apple Inc. is set to begin manufacturing iPhones in Pakistan after the government agreed to offer incentives under a proposed Mobile and Electronics Manufacturing Framework.
Under the plan, Apple will also refurbish iPhones in Pakistan for re-export. The government expects $100 million in the first year from the re-export of refurbished devices.
Engineering Development Board (EDB) Chief Executive Officer Hamad Ali Mansoor has said that the company has sought three key conditions: provision of land at discounted rates, an eight percent performance incentive, and permission 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,” Mansoor told a private media outlet.
He said Apple previously entered Indonesia, Malaysia and India using a similar model, where it initially focused on repairing older devices to train local manpower before moving to full-scale manufacturing.
The government currently offers a six percent performance incentive to mobile phone manufacturers. Officials plan to increase it to eight percent to attract Apple and other international firms.
Mansoor said Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan and the Secretary for Industries have extended support to the new framework.
He added that the government expects $557 million in investment from Chinese companies in mobile manufacturing. Memoranda of Understanding (MoU) were signed during Prime Minister Shehbaz Sharif’s visit to Beijing.
Officials anticipate that the policy will also attract investment in the production of laptops, tablets, watches, trackers and earbuds. The framework aims to position Pakistan as a regional hub for mobile and electronics exports.
Mansoor asserted that the government is focusing on localisation of components. Manufacturers have committed to increasing local parts usage to 35 percent in the first year, with a target of 50 percent later. Current localisation in mobile phone manufacturing stands at 12 percent.
The proposed framework includes an export levy of up to six percent to generate funds for technology investment. The government expects to collect Rs62 billion through the levy, which will be used to support localisation.
“There will be no export levy on phones costing Rs50,000 to Rs60,000,” Mansoor said. The levy will apply to phones priced above Rs100,000.