Pakistan’s illegal trade in electronics is not a niche border issue; it is a market-wide distortion that weakens tax collection, consumer safety, and investor confidence. The Pakistan Business Council (PBC) frames this as a national economic emergency, estimating the combined value of smuggling, under-invoicing, mis-declaration of imports, counterfeiting, and adulteration at about $68 billion per year, and the associated annual tax loss at about Rs. 8 trillion. PBC also warns that illegal trade funds crime, thrives in a cash-based and under-documented economy, and creates an uneven playing field that discourages lawful investment and scale-building in formal retail and manufacturing.
Electronics fit into this broader ecosystem because they are both in high demand and relatively easy to move through informal channels.
The PRIME Institute report, prepared with TRACIT, describes Pakistan’s porous borders and enforcement gaps as enabling the movement of illegal goods, explicitly listing electronics among the commonly smuggled categories, alongside petroleum, tobacco, and spare parts. While no single public dataset captures the full value of illegal electronics, the official record of seizures and the documented scale of the handset market show why the problem remains economically material.
Mobile phones are the most transparent window into the size of the challenge because Pakistan’s handset demand is great and recurring. The Government of Pakistan’s Mobile Device Manufacturing Policy estimates an annual market size of about 34 million handsets, making phones one of the country’s largest electronics consumption categories by volume. When a market of that size is partially supplied through smuggling or counterfeiting, the fiscal and commercial damage becomes structural rather than episodic.
Historical reporting illustrates how quickly the legal channel can be displaced when enforcement is weak. In 2016, The Express Tribune reported that smuggled mobile phones accounted for about 59 percent of demand, with an estimated value of $4.4 billion and an estimated revenue loss of $1.1 billion. Separately, Dawn’s reporting on Pakistan’s Device Identification, Registration and Blocking System (DIRBS) described the state’s intent to curb smuggled and counterfeit phones by blocking unregistered devices, which reflects the policy reality that the illegal channel was large enough to require a dedicated nationwide control system.
Recent trade statistics also hint at the economic stakes. One widely reported Pakistan Bureau of Statistics-based figure placed mobile phone imports at about $1.49 billion in FY2024–25, showing that even the legal import channel alone represents a substantial, monetized electronics flow. In practical terms, this means the illegal channel does not need to dominate volumes to cause significant fiscal leakage; even a marginal diversion can translate into large lost duties and taxes because phones, accessories, and many consumer electronics items face layered border taxation.
Publicly documented enforcement data reinforces that electronics smuggling is not limited to petty consignments.
PRIME and TRACIT cite Federal Board of Revenue reports on seizures of smuggled contraband and drugs valued at more than Rs. 3,052 million in 2022, Rs. 860 million in 2023, and Rs. 2,400 million in 2024, while also noting that border challenges facilitate smuggling across categories, including electronics. These are seizure values, not market size, but they are still a helpful indicator of the scale that enforcement agencies are encountering.
Case-level enforcement disclosures further show how electronics smuggling concentrates value in single events. In October 2025, FBR’s Directorate General of Intelligence and Investigation (Customs) publicly reported a Karachi airport operation that recovered a large quantity of high-value electronics, including Apple iPhones, iPads, Apple Watches, laptops, cameras, and drones. Also, they reported recovered gold, underscoring how electronics and other high-value goods move through the exact smuggling logistics.
This is where the economic security argument becomes concrete. Investors, formal importers, distributors, and compliant retailers take risk signals from the state’s ability to protect lawful channels. When illegal electronics enter at scale, they undermine formal pricing, weaken warranty and after-sales ecosystems, increase consumer exposure to unsafe counterfeit chargers and batteries, and reduce incentives for local assembly and documentation.
PBC’s broader diagnosis applies directly: illegal trade creates an unlevel playing field, produces and sells substandard goods, and is sustained by weak enforcement and high incentives to evade. PRIME and TRACIT further connect the prevalence of illegal trade to investment climate risks by showing how it distorts market dynamics and signals weak rule-of-law enforcement to investors.
One sentence should be enough to situate the broader black-economy context, without diluting the focus on electronics: national research and official advocacy repeatedly flag significant illegal-economy leakages across petroleum products, cigarettes, real estate, pharmaceuticals, tea, and consumer products, with PBC’s $68 billion estimate and PRIME and TRACIT’s enforcement and border-risk analysis providing the macro frame for why electronics smuggling cannot be treated as a minor problem.
The policy implication for Pakistan’s economic security is straightforward. Sustained border modernization, intelligence-led targeting of high-value consignments, market surveillance, and prosecution must operate together; otherwise, enforcement becomes a temporary squeeze rather than a permanent deterrent. If Pakistan wants credible investment in lawful electronics retail, distribution, and local assembly, the market must consistently reward compliance, and illegal supply must become a high-risk business rather than a routine alternative.