Almost all of Pakistan’s 30 mobile phone manufacturing units, including three foreign-owned facilities, have ceased operations. This is due to raw material shortages caused by import restrictions, which threaten the jobs of approximately 20,000 people.
Most companies fired their employees after paying half of their April salary in advance and assuring that they would be called back once production began. Yet, a mobile phone manufacturer raised worry that businesses were compelled to lay off employees during Ramadan due to the finance ministry’s “incompetent and bizarre methods.”
Due to the restrictions, it is now difficult for importers to obtain a letter of credit (LC), which is a financial promise that a buyer will pay a seller on time and in the right amount. As a result, it is now difficult to import the necessary equipment and components for making mobile phones.
The Pakistan Mobile Phone Manufacturers Association (PMPMA) informed the IT ministry that there was a shortage of mobile phones in the market and that local mobile supply had all but finished.
The situation was similarly upsetting for customers, according to Haji Abdul Rehman, chairman of the PMPMA, who had to pay significantly more for locally made mobile phones. The industry needs to import $170 million worth of components and parts each month to operate at full capacity, but imports have been halted due to government Regulatory limitations.
The majority of the raw materials used by manufacturers, which came from China, South Korea, and Vietnam, have almost run out, and banks had been warned not to accept imports. As a result, Pakistan’s reputation as a mobile manufacturer has been seriously damaged. Pakistani firms have sent their employees home, and 90% of Chinese shipments have returned to China.
In order for the industry to run at half its normal capacity, the PMPMA has asked the government to permit the import of the necessary quantity of parts.
CEO of Air Link Communication Ltd. As a sector that has been extensively shut down cannot be revived, Muzzaffar Hayat Piracha is worried about the industry’s future as a whole.
In the mobile phone sector, there are 20,000 young Pakistanis engaged directly and another 20,000 indirectly.