By Muskan Naveed ISLAMABAD, Dec 23 (INP-WealthPK): Samsung – one of the world’s largest mobile phone manufacturers – has entered the Pakistani market for the production of its mobile phones. Lucky Cement announced in July that its subsidiary Lucky Motor Corporation has entered into a partnership with Samsung for localized mobile phone production. According to the seasoned economist and principal of the National University of Sciences and Technology (NUST), Ashfaque Hassan Khan, import compression can be one of the key elements for the Pakistani economy towards a road of recovery. The economist while speaking to INP-WealthPK listed mobile phones along with some other items that are viable for import compression. The production facility is lined with top-notch equipment and local manpower. Lucky Group has announced to aim for the production of 3 million mobile phone units per year. The production of mobile phones by Samsung has paved the path towards potential exports of the commodity by Pakistan – which will serve as one of the ideal import substitution strategies necessary for the economy. Mobile phone imports According to data from the Pakistan Bureau of Statistics (PBS), the fiscal year 2020-21 saw imports of mobile phones worth $2.065 billion against imports of $1.369 billion during the previous year – recording a staggering increase of 50.75 percent. Mobile phone imports have been climbing steadily over the years with a steep jump since 2019. It is regarded as one of the major non-essential items causing a burden on the country’s burgeoning import bill, which has led to various other economic woes. It may be pointed out that the sudden surge after 2019 in mobile phone import cannot be solely attributed to increasing demand. Pakistan Telecommunications Authority (PTA) implemented a Mobile Device Identification, Registration and Blocking System (DIRBS), which resulted in the translation of mobile phone smuggling through the black market into the formal economy. Fruits of Pakistan’s mobile phone policy The government has been actively pursuing a mobile phone policy in order to curb the rising imports. Apart from the DIRBS, the government is also incentivizing the import of cheaper phones to boost local assembly with rising duties on more expensive phones. The government’s smartphone policy has implemented a higher duty on the import of completely-built units (CBUs) to lead the shift towards semi-knocked down (SKD) kits and their assembly in the country. The government’s efforts have borne fruitful results. There has been an increase in the import of SKD phones. During October 2021, 80 percent of the mobile phones were in SKD form. The kits are then assembled at various assembly plants in Pakistan. While there isn’t any major foreign reserve earning through assembling mobile phones, it does result in increased employment in the domestic industry. The government has increased the tax incentives for localization of mobile phone assembly and all major mobile phone brands with the exception of Apple are now assembling locally. Samsung has been testing waters during the current year by importing SKDs and has now announced production to capture the market currently dominated by Vivo and Infinix. Samsung will be producing all mobile phones in Pakistan – with the exception of high-value phones. Moreover, Xiomi is also expected to enter the Pakistani market soon.