Soaring Dollar Rate Plummets Demand for Tech Gadgets, Stirring Crisis in IT Industry

Soaring Dollar Rate Plummets Demand for Tech Gadgets, Stirring Crisis in IT Industry

A sharp surge in the value of the US dollar is leading to escalating prices for tech devices such as laptops and smartphones, triggering a dramatic downturn in demand and stirring significant disruption in the information technology (IT) sector. 

Even in the wake of the billion-rupee growth of the tech industry fueled by the pandemic lockdowns – which necessitated owning various communication devices such as laptops, computer peripherals, and smartphones for online education and remote working – the recent economic volatility, compounded by the skyrocketing dollar rate, is shrinking the previously booming sector. 

Bilal Ahmed, a significant tech commodities dealer at Hafeez Center, voiced his concern over the considerable slump in sales over the past year. 

“The demand for devices has slumped by almost 70 percent, following the price doubling of PC hardware,” lamented Ahmed. He further stated that the high cost of legally sourced tech gadgets has paved the way for a thriving black market in the IT industry. 

Market insiders report that the 70 to 100 percent hike in prices for gadgets such as laptops, smartphones, and computer components, coupled with substantial import duties, has encouraged a rise in the smuggled equipment market, now accounting for 65 percent of the tech market share. 

The extensive proliferation of smuggled devices and high import taxes has led to the illicit practice of substituting the International Mobile Equipment Identity (IMEI) numbers of new, expensive smartphones with those of cheaper, second-hand options to dodge duties. 

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Additionally, the prevalence of black-market devices like laptops has created a dilemma for students and professionals who, after purchasing faulty products, scramble to find affordable repairs as warranty claims are not an option for unlawfully obtained items. 

Tech specialists like Athar Sheikh, manager of a digital IT store, attribute the ongoing crisis to economic conditions and the escalating dollar rate. “While gadget prices remain steady in dollar terms, for Pakistani consumers, the cost is continually rising due to the soaring dollar rate,” Sheikh noted with regret. He further criticized the substantial taxation by the Pakistan Telecommunication Authority (PTA), which has been a severe blow to the already struggling tech industry. 

“PTA imposes an import duty of almost Rs 162,000 on a smartphone priced at only Rs 150,000,” Sheikh revealed. 

Echoing Sheikh’s sentiments, Shehzad Ilyas, an IT expert affiliated with a prominent software house in Lahore, stressed the necessity of timely reductions in import duties on the IT sector for a technological revolution in Pakistan to occur. “As the world digitizes and many developed countries are working towards introducing 6G technology, we remain stuck on 4G. If we are to move towards the future, our government must provide subsidies to the tech sector,” Ilyas strongly asserted.

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