ISLAMABAD: After making its first-ever export shipment some 14 months back, Pakistan is likely to lose the second export order for smartphones mainly due to policy issues that have hindered the country’s export potential and restricted entry of global players too, say industry players.

In a letter written to the Ministry of IT and Telecom, mobile manufacturers have pointed out that due to the restrictions on the opening of letters of credit (LCs), they were not even able to meet the local demand.

The first export consignment of 4G smartphones was made in August last year after securing an order from the United Arab Emirates (UAE) for 120,000 units, but the same company maintains that import restrictions by the State Bank of Pakistan (SBP) have made it extremely difficult to achieve the target.

“We were all very happy when the first-ever shipment of 5,500 mobile sets tagged ‘Manufactured in Pakistan’ was sent to the UAE in August 2021, but things have not been good for the mobile manufacturing sector in the past 14 months,” said Inovi Telecom CEO Zeeshan Mian Noor.

He said local mobile phone makers have not been able to secure export orders since August last year because of inconsistent policies.

“We have been promised higher incentives and a five per cent export rebate but these assurances have not been fulfilled by the government,” Mr Noor said.

He added that a fresh order has been secured but its timely completion seems difficult because the SBP has not allowed the import of the key components used for mobile sets.

He added that the local mobile industry produces mid-level sets and these can penetrate markets of the Middle East, Africa, Iraq, Iran and Afghanistan, etc, but supportive export policies were needed.

Mr Noor, who is also the deputy chairman of the Pakistan Mobile Phone Manufacturers Association, said LCs amounting to $83m were allowed against the demand of $150m.

“When the domestic needs were not being fulfilled how can we export without importing key components,” he added.

The key components such as cameras, motherboards, technical equipment, etc are imported from China, Korea, Japan, the US and some European countries.

At the same time, a similar situation was being faced by AirLink, the local partner of Xiaomi, which is the third largest player in the global mobile market.

An amount of “$674m has been arrested by Indian authorities belonging to Xiaomi India, which is a wholly owned subsidiary of Xiaomi based in China, on charges of tax evasion and other financial frauds”, said AirLink Communication CEO Muzzaffar Hayat Piracha.

“They want to reduce their presence in India and shift the export business to Pakistan, but we cannot do anything as there were policy issues in Pakistan,” Mr Piracha said.

Published in Dawn, October 19th, 2022