Islamabad, February 19 Pakistan has agreed to provide incentives to the American tech giant Apple to start manufacturing iPhones in the country, a media report said on Thursday.
Apple has also agreed to refurbish iPhones in Pakistan for re-export under the new framework. The government expects $100 million from the re-export of refurbished iPhones in the first year, The Express Tribune newspaper reported.
It said the Apple management had asked for the provision of land at discounted rates, an 8% performance incentive, and plans 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," Engineering Development Board CEO Hamad Ali Mansoor told the newspaper.
He said that Apple had entered Indonesia, Malaysia, and India with the same model, where it initially started repairing two to three-year-old iPhones, aimed at training local manpower, and later began manufacturing those phones.
The government is already giving a 6% performance incentive to existing mobile phone manufacturers. However, it is going to be increased to 8% to attract Apple and other global manufacturers.
He added that Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan and the secretary of industries had extended full support to the new mobile and electronics policy.
"We are also expecting investments of $557 million from Chinese companies in mobile manufacturing," Mansoor said, adding that MoUs had been signed during PM Shehbaz Sharif's visit to Beijing.
He anticipated that the new policy would also bring investment to the manufacturing of laptops, tablets, watches, trackers, and air buds. The government wants to make Pakistan a regional hub of mobile and electronics exports. "The new policy has been framed while looking at this objective," he remarked.
"We are focusing on the localization of mobile phones and electronics," Mansoor said, adding that phone manufacturers had assured the government that they would increase the use of local parts up to 35% in the first year, which would later be pushed to 50%.
At present, there is 12% localization in phone manufacturing.
The government has planned to impose an export levy of up to 6% in the Mobile and Electronics Manufacturing Framework to generate funds for technology investment. It expects a collection of Rs62 billion, which would be used for accelerating localization in phone manufacturing.
"There will be no export levy on phones costing PKR 50,000 to PKR 60,000," the CEO said. The levy will be imposed on phones above PKR 100,000.
At present, the government is implementing a policy to provide electric two-wheelers for people at subsidized rates. It has allocated PKR 9 billion in the budget to provide a 40% subsidy. Up to 3% tax has been imposed on the gross sale value of conventional local and imported vehicles to roll out the e-bike scheme.
