Pakistan Reduces Smartphone Duties by Up to 20% for FY 2026‑27
The federal government has lowered regulatory and additional customs duties on imported mobile phones, cutting rates for high‑end smartphones and reducing ACD across all categories.
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Desk Analysis
How This Affects the Exchange
Sector Effect
Neutral · Watch
Duty cuts may aid telecom demand but have limited direct effect on listed PSX companies; watch for any impact on technology sector stocks.
Sectors & Direction
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- TechnologyNeutral effect
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Sectors: Technology — Neutral · Watch. Duty cuts may aid telecom demand but have limited direct effect on listed PSX companies; watch for any impact on technology sector stocks.
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Open on ProPakistani## Duty Reductions Announced
The Ministry of Commerce disclosed that, effective FY 2026‑27, regulatory duties on imported Completely Built Unit (CBU) smartphones have been cut across all price bands. The most significant relief applies to handsets priced above $500, where the duty falls from Rs 22,000 to Rs 17,600 per device – a 20% reduction or Rs 4,400 per phone.
## Additional Customs Duty (ACD) Cuts
The Additional Customs Duty on listed smartphone and cellular‑phone categories has been lowered from 6% to 4%. For phones imported in Completely Knocked Down (CKD) and Semi‑Knocked Down (SKD) form, the regulatory duty has been trimmed from 5% to 4%, with ACD also reduced to 4%.
## Policy Context
These changes are part of the tariff rationalisation measures under the National Tariff Policy 2025‑30, introduced in the FY 2026‑27 budget. They follow a sharp rise in mobile‑phone imports, which jumped from $1.497 billion in FY 2025‑26 to $1.888 billion, while CBU smartphone imports more than doubled to $357.7 million.
## Local Manufacturing Incentives
The Mobile Device Manufacturing Policy 2020‑25 has expired, and a replacement has not yet been approved. Nonetheless, incentives granted to domestic manufacturers and assemblers under the previous policy remain protected by the Fifth Schedule of the Customs Act, 1969. The government therefore aims to balance lower import duties with continued support for local assembly.
## Market Implications
Lower duties are expected to reduce handset prices for consumers, potentially boosting demand for mobile services and accessories. While the move benefits telecom operators, most of the major Pakistani telecom firms are not listed on the PSX, limiting direct equity impact. The policy may also aid listed technology distributors and retailers, though the effect is likely modest.
## Outlook
Investors should monitor the response of listed technology and consumer‑electronics companies, as well as any subsequent policy updates affecting local manufacturing incentives.