The federal government has drafted a new five-year auto policy that proposes abolishing duties on imported vehicles, with customs duties gradually being reduced to 15%. The policy will be formally announced after final approval.
According to sources, consultations with stakeholders are currently underway, while the International Monetary Fund (IMF) is also being kept in the loop. The government aims to open up the auto sector to attract new investment and encourage fresh entrants into the market.
However, local automobile manufacturers have raised concerns, warning that easing restrictions on used car imports could hurt domestic production. They are also urging the government to introduce a clear and long-term policy framework.
Sources further indicate that proposals under consideration include increasing the age limit for imported used vehicles, extending the auto policy period from five to ten years, and tightening safety standards and licensing regulations.
The draft policy is expected to be shared with the IMF by the end of the month. Once it receives approval, it will be presented to the federal cabinet for final approval.
The implementation of this policy could significantly reshape Pakistan’s auto market by making imported vehicles more affordable for consumers, while also increasing competition for local manufacturers.
However, its impact will largely depend on the final structure of duties and regulatory safeguards included in the policy.
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