A few days ago, the government of Pakistan removed all the barriers to local mobile phone manufacturing. The State Bank of Pakistan (SBP) granted permission to open a mobile manufacturing LC in the country, which implied that local smartphone manufacturers could now import mobile phone parts. However, through a recent notification, SBP again imposed new rules for import transactions. The IT and mobile industry sees this development as negative as SBP has put all the mobile parts imports under chapter 85 of the customs.
Another Setback for Mobile Industry as SBP Issues new Rules For Import Transactions
A circular letter has been issued by SBP regarding imports of goods. It entails,
The list of goods for which Authorized Dealers are required to seek prior permission from Foreign Exchange Operations Department (FEOD), SBP-BSC for initiating the import transaction, has been updated. Henceforth, Authorized Dealers shall be required to seek prior permission from FEOD, SBP-BSC before initiating transactions for import of goods listed in the enclosed Annexure (mentioned in the image below). All other instructions on the subject shall remain unchanged. Authorized Dealers are advised to bring the same to the knowledge of all the concerned and ensure meticulous compliance of the above & other applicable regulations on the subject. Authorized Dealers are especially instructed to bring these instructions to the knowledge of their customers and advise them to approach the bank before initiation of import transaction of any item covered under this circular letter.
Annexure
So now, the local manufacturers will require prior approval from FEOD. The state bank of Pakistan can also put the approval in pending so that the transaction cannot happen and essentially import is blocked. This isn’t a good sign for the country’s local mobile industry which witnessed a boom in the last couple of years. Pakistan achieved a milestone in 2021 with domestic production of mobile phones surpassing imports for the first time. However, such steps as recently taken by SBP would plummet the exports and would prove detrimental to the local mobile industry.
Furthermore, in this regard, the CEO of Swift Biz Solutions (DIGIT Brand), Mr. Abdul Rehman Mahmood said,
The IT and Telecom industry is the backbone of Digital Pakistan, a dream every government wants to achieve. Such hindrances by Govt of Pakistan in import of IT and Telecom equipment will lead us back to stone age. This will not only hamper our export plan but will also affect badly infrastructure up gradation. We need to stress that IT and Telecom products are not luxury but are important for digitization and must not be blocked or delayed from import. The fixed and mobile broadband equipment will be delayed due to this which will affect the internet penetration in the country. Mobile Phones manufacturers are already suffering badly due to delayed or nonapproval of raw material. This will lead to unemployment.
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