THE government’s decision to strictly enforce localization requirements under the Mobile and Electronics Device Manufacturing Policy 2026–33 is a step in the right direction and long overdue.
For years, our manufacturing landscape has remained confined to low-value assembly operations, with the bulk of components imported from abroad. This approach may have boosted short-term output figures, but it has failed to create a robust industrial base or meaningful employment opportunities.
By linking incentives with clear localization benchmarks and introducing penalties for non-compliance, the policy sends an unambiguous message: Pakistan is no longer content with being merely an assembly hub. The withdrawal of concessionary duties, application of normal tariff rates and imposition of import restrictions are necessary corrective measures to discourage excessive reliance on imported parts and to nudge manufacturers towards domestic value addition. The inclusion of an 8% fixed and non-discretionary R&D allowance on exports is another positive feature of the policy. By rewarding verifiable export performance, the government is encouraging innovation, quality improvement and competitiveness in international markets which are key ingredients for sustainable economic growth. Encouraging localization has multiple long-term benefits. It helps expand the industrial ecosystem by fostering ancillary industries such as components manufacturing, tooling, packaging and logistics. This expansion, in turn, creates skilled and semi-skilled jobs, offering productive employment to the country’s growing youth population. At a time when unemployment and underemployment remain pressing challenges, policies that directly link industrial growth with job creation deserve strong support. Moreover, greater localization can reduce production costs over time, ensuring the availability of products at more affordable prices for consumers. Developing local supply chains also reduces vulnerability to external shocks, currency fluctuations and global supply disruptions. Importantly, this policy approach should not remain limited to the mobile and electronics sector. Similar localization-driven frameworks are urgently needed in other industries, particularly the automobile sector, where import dependence remains high despite decades of local presence. True industrialization cannot be achieved without moving beyond screwdriver assembly models across all major manufacturing domains, supported by consistent policy implementation, skills development initiatives, technology transfer mechanisms and long-term commitment from both the public and private sectors.
