Pakistan is moving toward a target of 50 percent domestic value addition in mobile phone manufacturing through a new policy under formulation by the Ministry of Industries and Production. Local assembly currently sits between 10 and 20 percent, leaving a wide gap that the state intends to close by shifting away from basic import-dependent assembly toward component production. This industrial shift aims to reduce reliance on imported parts and build a sustainable domestic supply chain across the engineering sector. The Ministry of Industries and Production is building upon the foundation established by the Mobile Device Manufacturing Policy 2020–2023. That earlier framework successfully attracted domestic and foreign investment to set up assembly plants across the country. However, the existing operations remain focused primarily on assembling imported knocked-down kits rather than fabricating parts locally. The new policy addresses this limitation by incentivizing technology transfer, local component manufacturing, and supporting industrial ecosystems.

Readers tracking industrial growth can also review details on Pakistan Mobile Phone Imports Fall 16.6% to $417M in Q1 FY27 to understand the broader trade context.

What Prompted the New Manufacturing Policy

Past regulatory frameworks focused heavily on tariff protections and tax exemptions to encourage companies to open local assembly plants. Those measures achieved the initial objective of replacing finished goods imports with domestically assembled units. Factory output expanded significantly over a span of several years, employing thousands of assembly workers and technicians. Yet, the deep manufacturing tiers required to produce active components, chargers, and batteries domestically remained absent. Raw materials and sub-components still enter the country via container shipments, meaning foreign suppliers capture the majority of the financial value from each device sold. Officials drafted the updated policy to alter this economic equation. Government planners intend to tie future tax incentives directly to local sourcing ratios, forcing assemblers to partner with domestic plastic injection molders, circuit board fabricators, and packaging suppliers.

How Much Value Addition Exists Today

Current estimates place domestic value addition in mobile device manufacturing at approximately 10 to 20 percent. The proposed framework targets an increase up to 50 percent over time. Achieving this benchmark requires attracting fresh capital into higher-value manufacturing activities and establishing a competitive local supply chain for electronic components. Building this supply chain requires substantial capital investments in precision machinery, testing laboratories, and technical training institutes. Local vendors face high borrowing costs and expensive electricity tariffs that complicate long-term budgeting. Financial institutions have historically viewed component manufacturing as a high-risk sector due to rapid technological shifts. The new policy incorporates proposals for subsidized credit lines specifically designated for industrial equipment purchases and facility upgrades.

What Production Numbers Reveal About Local Assembly

Local manufacturing plants produced 20.08 million handsets between January and September 2026, overshadowing commercial imports of 2.85 million units during the same nine-month window. Official production figures break down the locally assembled output into specific categories:

  • Smartphones total approximately 8 million units.
  • 2G phones account for roughly 12 million units.
  • Active networks reflect this adoption, with smartphones making up 71 percent of active devices and 2G models covering the remaining 29 percent.

For historical context on trade volumes, readers can check Pakistan's Mobile Phone Imports Drop 18.93% in Q1 FY25!.

Which Brands Lead the Local Assembly Market

The competitive environment among local assemblers shifted during the first nine months of 2026. VGO TEL emerged as the largest producer in the country, surpassing previous market leaders. The top manufacturers by production volume during January–September 2026 comprise:

  • VGO TEL led the market with 2.50 million units.
  • Infinix followed in second place with 1.96 million units.
  • Itel recorded 1.59 million units.
  • TECNO produced 1.16 million units.
  • Samsung manufactured 1.04 million units.
  • Vivo reached 0.99 million units.
  • Nokia assembled 0.97 million units.
  • China Mobile produced 0.72 million units.
  • X Mobile outputted 0.71 million units.
  • G’FIVE accounted for 0.64 million units.

In prior years, Infinix held the top ranking, producing 3.98 million handsets in 2024 and 3.65 million units in 2025.

How Import Bills and Taxes Stand Now

Pakistan’s cumulative mobile phone import bill dropped to Rs116.01 billion during July–September FY27, marking an 18 percent decline from Rs141.42 billion in the corresponding period of the previous fiscal year. In dollar terms, the first-quarter import bill fell 16.6 percent to $417.24 million. September 2026 imports rose 7.1 percent month-on-month to $143.14 million from $133.66 million in August, though this figure remained 28.2 percent lower than September 2025. Tax calculations and rates for mobile devices remain under the jurisdiction of the Federal Board of Revenue rather than the Pakistan Telecommunication Authority.

Source: PhoneWorld