- Govt mulls introducing stringent measures to prevent misuse.
- Auto sector opposes car imports, govt wants balanced approach.
- Industry comprises of roughly 1,200 factories, provides 2.5m jobs.
ISLAMABAD: The federal government is considering abolishing one scheme for importing used cars while tightening regulations for the two remaining schemes, The News reported on Tuesday.
The Ministry of Commerce has forwarded a summary to the Economic Coordination Committee (ECC) of the cabinet, proposing the abolition of the Personal Baggage Scheme.
The other two schemes — Transfer of Residence and Gift Scheme — are proposed to be made more stringent, with the ministry suggesting measures to curb their misuse.
“Different proposals are under consideration to tighten the Gift and Transfer of Residence schemes for importing used cars, while the Baggage Scheme is expected to be abolished. The ECC will take the final decision in this regard,” top official sources confirmed to the publication.
The auto sector is strongly opposing used car imports, but the government is seeking a balanced approach. The auto sector argued that data compiled from December 2024 to October 2025 indicates a sharp resurgence in used-vehicle imports.
In comparison, the share of used cars remains negligible in regional peers: India maintains virtually zero used-car inflows, Vietnam stands at 0.3% and Thailand at 1.2%.
The auto sector has informed the government that regional economies restrict used-car imports to safeguard their automotive value chains.
Pakistan has charted the opposite course — particularly after Notification 1895 issued by the Ministry of Commerce on September 30, 2025, which allowed imports of vehicles up to five years old. After June 2026, this limit may reportedly be removed entirely, potentially opening the floodgates for large-scale inflows of aged vehicles.
Pakistan’s auto sector currently comprises roughly 1,200 factories, provides 2.5 million jobs, generates an estimated Rs500 billion annually in government revenue, and holds approximately $5 billion in foreign investment.
“Import-friendly policies risk diluting these gains at a time when industrial revival and localisation are declared priorities,” said Shehryar Qadir, Senior Vice Chairman of the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM).
Of the 45,758 vehicles imported into Pakistan during the period (December 2024–October 2025), nearly 99% originated from Japan — a right-hand-drive market compatible with local driving conditions. The remaining numbers were negligible: 130 units from Thailand, 55 from the US, 49 from Jamaica, 47 from Germany, 22 from Australia, 20 from China, and just five from the UAE.
Industry estimates put the loss faced by local vendor industries at roughly Rs50 billion over the analysed period. The foreign-exchange impact is similarly pronounced: local manufacturers require about $10,138 in documented banking-channel imports per vehicle, whereas used-car importers draw an estimated $14,010 per unit — much of it through informal channels.
While the government is drafting a new Auto Policy to strengthen domestic manufacturing, stakeholders remain split on whether localisation efforts can succeed alongside a liberal used-car import regime. The data suggests that Pakistan is an outlier among manufacturing economies — both in policy direction and market outcome.
