Apple’s Inaugural Steps in Pakistan
ISLAMABAD, Feb 20: The American technology powerhouse, Apple Inc., is set to embark on manufacturing operations for iPhones within Pakistan’s borders.
This initiative follows the federal government’s decision to extend incentives under a proposed Mobile and Electronics Manufacturing Framework, as confirmed by government officials.
As part of this strategic plan, Apple will undertake the refurbishment of used iPhones in Pakistan for international re-export. Authorities forecast a remarkable influx of approximately $100 million in the inaugural year.
The framework is currently pending approval from Prime Minister Shehbaz Sharif and encompasses attractive provisions such as subsidized land, an 8% performance-based incentive, and authorization for the repair of devices aged between two and three years.
Hamad Ali Mansoor, Chief Executive Officer of the Engineering Development Board (EDB), remarked that these incentives are akin to models previously adopted by Apple in markets like Indonesia, Malaysia, and India.
These countries initially facilitated refurbishment operations to cultivate local expertise, setting the stage for a shift to comprehensive manufacturing.
At present, Pakistan offers a 6% performance incentive to mobile manufacturers; however, a proposed increment to 8% aims to entice Apple and other multinational entities.
Mansoor noted that the proposed framework enjoys the enthusiastic support of Haroon Akhtar Khan, Special Assistant to the Prime Minister on Industries and Production, along with key ministry officials.
In addition, the government is poised to welcome an investment influx amounting to $557 million from Chinese mobile manufacturers, facilitated by Memoranda of Understanding established during Prime Minister Sharif’s recent trip to Beijing.
Officials indicate that this broader policy aims to establish Pakistan as a regional nexus for mobile and electronics exports, spanning products such as laptops, tablets, smartwatches, trackers, and wireless earbuds.
The framework, moreover, places a premium on localization efforts. Manufacturers have committed to elevating the utilization of locally sourced components from the current 12% to 35% in the first year, with an ambitious target of 50% in the following years.
Export Levy Initiative
In a bid to underpin technological advancements and localization initiatives, the government is contemplating the introduction of an export levy of up to 6% on premium mobile devices.
Authorities anticipate this levy could yield Rs62 billion, earmarked for reinvestment into bolstering domestic manufacturing capabilities. Mobile phones priced between Rs50,000 and Rs60,000 will be exempt, while those exceeding Rs100,000 will attract the levy.
Expansion of Electric Vehicle Subsidy Program
Simultaneously, the government is broadening its electric vehicle (EV) initiative. A budget allocation of Rs 9 billion is currently supporting a 40% subsidy for electric two-wheelers, partially funded through a 3% tax levied on the gross sale value of traditional vehicles.
Officials report that Rs12 billion has been accrued within six months, surpassing the initial target and enabling the potential extension of subsidies to electric four-wheelers.
A Lahore-based company is in the process of establishing a plant aimed at producing accessible electric vehicles, priced between Rs700,000 and Rs800,000, comparable to entry-level conventional offerings.
The forthcoming phase of the e-bike program anticipates the elimination of ballot systems, opting instead for a universal access model. Plans are also underway to digitize the certification and regulatory frameworks of the auto industry, promoting enhanced transparency and efficiency.
Source link: Arabtimesonline.com.
