The hitherto-surging cellphone imports are catching their breath this fiscal. As per the latest data from the State Bank of Pakistan (SBP), the mobile phone imports declined by 9 percent year-on-year to settle at $1.22 billion in the Jul-Feb period of FY22. For comparison’s sake, during the same period last fiscal (8MFY21), these imports had gone up by 90 percent year-on-year, and in the fiscal before that (8MFY20), the yearly growth rate was 94 percent. Folks who were afraid about large forex burn on phones can relax!

During 8MFY22, the decline in mobile phone imports has provided $125 million in forex savings relative to the same period last fiscal, as per the SBP data. It remains to be seen if this declining trend will sustain until the fiscal close. In terms of share in imports, mobile handsets contributed 2.6 percent of Pakistan’s overall merchandise imports of $47.9 billion in 8MFY22 (down from 4.2 percent share it had in 8MFY21).

It must be noted that the import reading from the Pakistan Bureau of Statistics (PBS) shows 8 percent year-on-year growth in mobile phone imports, which clocked $1.41 billion during 8MFY22. That’s an increment of $100 million compared to the same period last fiscal. The PBS trade data is based on shipments, whereas the SBP provided payments-based trade data.

Cellphone imports last fiscal had a worrying rise, as Pakistan imported $1.97 billion worth of mobile phones in FY21, as per SBP data, showing a growth of 80 percent compared to $1.1 billion during FY20. At the pace that has been seen during 8MFY22, mobile phone imports may close around $1.8 billion mark for the whole of FY22 – a potential forex saving of almost $200 million. That’s not a lot of money on the grand scale of overall import bill, but it is still significant to actually save forex on these imports.

There has been a trend of volumes of CBU imports (finished mobile phones) being overtaken by rising volumes of CKD/SKD imports (used in local assembly of mobile phones). Back in FY21, PBS data show that imports of CKD/SKD mobile phones jumped to 18.53 million units, a sudden and huge growth of 947 percent year-on-year. Whereas the CBU mobile phone imports were 21.8 million, growing by 12 percent year-on-year.

There has been a conscious policy shift by the government in recent years to promote local assembly of mobile phones, for which the PTA’s DIRBS (Device Identification, Registration and Blocking System) mechanism really came in handy to counter illegal imports. Reduced traveling during pandemic also curbed grey flows. It isn’t clear what’s happening in FY22, but it appears that CBU imports (whose per unit value is, on average, twice as large as CKD/SKD) are falling in FY22 amid rising CKD/SKD imports.

In fact, the latest data from the Pakistan Telecommunication Authority shows a sharper shift in favor of local assembly. During CY21, commercial imports of mobile phones (CBUs) stood at 10.26 million units, down 58 percent year-on-year; whereas local assembly of mobile phones reached 24.66 million units in CY21, up 89 percent year-on-year. Let’s see what the rest of this fiscal has in store for handset imports!