American tech giant Apple is preparing to begin iPhone production in Pakistan after the government agreed to extend incentives under a proposed Mobile and Electronics Manufacturing Framework.
Under the same framework, Apple has also agreed to refurbish used iPhones in Pakistan and export them to international markets. Officials expect the re-export of refurbished devices to generate around $100 million in the first year, The Express Tribune reported.
Apple has reportedly sought land at concessional rates along with an 8 per cent performance-based incentive. The company also plans to start by repairing iPhones that are two to three years old.
“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 (EDB) Chief Executive Officer (CEO) Hamad Ali Mansoor told The Express Tribune newspaper.
Currently, the government provides a 6 per cent performance incentive to existing mobile manufacturers. This is expected to be increased to 8 per cent in order to attract Apple and other international firms.
Mansoor said Apple followed a similar strategy in Indonesia, Malaysia and India. In those countries, the company initially began by repairing older iPhones to train local workers before moving to full-scale manufacturing.
He added that Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan, along with the industries secretary, had assured complete support for the new policy.
Broader investment plans
The EDB chief also said the government expects around $557 million in investment from Chinese firms in the mobile manufacturing sector. Memorandums of understanding were signed during Prime Minister Shehbaz Sharif’s visit to Beijing.
Officials believe the revised framework will also attract investment in laptops, tablets, smart watches, trackers and earbuds. The government aims to position Pakistan as a regional centre for electronics exports. “The new policy has been framed while looking at this objective,” Mansoor said.
The government is seeking to increase the use of locally produced components in mobile phones. Mansoor said manufacturers have assured authorities that localisation will rise to 35 per cent in the first year and later reach 50 per cent. At present, localisation stands at 12 per cent.
An export levy of up to 6 per cent has been proposed under the new framework to raise funds for technology investment. The government expects to collect ₹62 billion, which will be used to boost local production.
“There will be no export levy on phones costing PKRs 50,000 to PKRs 60,000,” the CEO said, adding that the levy would apply to devices priced above PKRs 100,000.
Electric mobility push
Separately, the government is continuing its scheme to promote electric two-wheelers. A budget allocation of PKRs 9 billion has been made to offer a 40 per cent subsidy. To fund the initiative, up to a 3 per cent tax has been imposed on the gross sales value of conventional locally made and imported vehicles.
Officials say these combined measures are aimed at strengthening Pakistan’s manufacturing base and expanding its role in global technology supply chains.