Pakistan is preparing a major shift in its auto sector, with plans to make imported vehicles more accessible and the market more competitive.
Govt Considers Reducing Duties on Used Cars
According to Beyond Time News, the federal government is working on a new auto policy that includes gradually reducing duties on used car imports. The policy is expected to take effect from July 1, 2026.
Officials say the draft policy is currently under consultation with the International Monetary Fund, as part of broader economic reforms.
Gradual Tariff Reduction Plan
Under the proposed plan, the government aims to phase out additional customs and regulatory duties over the next four to five years. By 2030, overall customs duty rates are expected to drop significantly.
In addition, authorities may allow the import of vehicles older than five years. However, these vehicles must meet strict safety and environmental standards before entering the market.
More Flexible Import Rules Ahead
The policy could also allow the import of vehicles up to seven years old after the fiscal year 2027. At the same time, the government plans to reduce additional duties by around 10% each year starting from FY2027.
These changes aim to create a more open and competitive auto market while giving consumers more choices.
Read more: Germany brings back used car subsidies to boost market
Focus on Transparency and Competition
The Ministry of Industries and Production is leading this initiative to simplify the import system and improve transparency. Officials believe that reducing tariffs will attract new players and improve overall service quality in the auto sector.
Stronger Safety Standards for Local Vehicles
Alongside import reforms, the government plans to introduce stricter safety rules for locally manufactured vehicles. A new Motor Vehicle Development Act will likely be presented in parliament to ensure better safety compliance.
IMF Backs Pakistan’s Reform Progress
Meanwhile, the IMF has acknowledged Pakistan’s progress in implementing economic reforms. According to Beyond Time News, IMF Managing Director Kristalina Georgieva praised the country’s efforts during recent meetings with Finance Minister Muhammad Aurangzeb.
She noted that these reforms have helped maintain economic stability and boost investor confidence.
Final Outlook
The upcoming auto policy could reshape Pakistan’s car market by lowering costs and increasing competition. While final approval is still pending, the proposed changes signal a move toward a more open and consumer-friendly system.
