Warnings Your Apk Is Using Permissions That Require A Privacy Policy: (android.permission.READ_PHONE_STATE)

Your app's manifest.xml having these permission to access information from your's device but you don't have privacy policy link while submitting on the play store. so you getting this warning.

Need privacy policy for the app If your app handles personal or sensitive user data

Adding a privacy policy to your app's store listing helps provide transparency about how you treat sensitive user and device data.

Update 1

The privacy policy setting in Google Play Console has changed locations.

In Google Play Console,
Select Store presence → App content.
Under Privacy Policy.

Update 2

Select Policy → App content at the far bottom left.
Under Privacy Policy.

Just try to add this line to your manifest file:

<uses-permission android:name="android.permission.READ_PHONE_STATE" tools:node="remove" />

and add attribute xmlns:tools="http://schemas.android.com/tools" to your <manifest> tag to define namespace tools

From the documentation for tools:node="remove":

Remove this element from the merged manifest. Although it seems like you should instead just delete this element, using this is necessary when you discover an element in your merged manifest that you don't need, and it was provided by a lower-priority manifest file that's out of your control (such as an imported library).

It's third party library. You can find the culprit in build/outputs/logs/manifest-merger-release-report.txt