Is Apple Planning To Manufacture iPhones In Pakistan? Here's The Truth

American tech giant Apple is set to start manufacturing iPhones in Pakistan after the government has agreed to offer incentives in the proposed Mobile and Electronics Manufacturing Framework, according to a media report published in Pakistani media on Thursday. However, this turned out to be “partially fake”.

The report claimed the premium phone manufacturer agreed to manufacture in Pakistan after the Shehbaz Sharif-led government agreed to provide incentives and land at much lower costs. But as the information surfaced, it was learnt that Apple would not manufacture new iPhones in Islamabad, but a refurbishment unit for re-export under the new framework would be established.

What Apple demanded from Shehbaz Govt

According to a report by The Express Tribune newspaper, it said the Apple management had asked for the provision of land at discounted rates, 8 per cent 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 stepped into Indonesia, Malaysia and India with the same model, where it started repairing two to three-year-old iPhones initially aimed at training the local manpower and later began manufacturing those phones.

Pakistan's scheme to lure investors

The government is already giving a 6 per cent performance incentive to the existing mobile phone manufacturers. However, it is going to be increased to 8 per cent 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.

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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 localisation 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 per cent in the first year, which would later be pushed to 50 per cent.
At present, there is 12 per cent localisation in phone manufacturing.

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The government has planned to impose an export levy of up to 6 per cen 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 localisation in phone manufacturing.

"There will be no export levy on phones costing PKRs 50,000 to PKRs 60,000," the CEO said. The levy will be imposed on phones above PKRs 100,000.

At present, the government is implementing a policy to provide electric two-wheelers for people at subsidised rates. It has allocated PKRs 9 billion in the budget to provide a 40 per cen subsidy. Up to 3 per cent tax has been imposed on the gross sale value of conventional local and imported vehicles to roll out the e-bike scheme.

(With inputs from agency)