The government of Pakistan is preparing to introduce a significant shift in its used car import framework, aiming to streamline the process for overseas Pakistanis while aligning it with the upcoming five-year commercial import policy. This new policy is expected to take effect on October 1, 2025, and could reshape how used vehicles enter the local market.
Merging Import Schemes for Greater Clarity
Currently, three main schemes allow overseas Pakistanis to import vehicles into Pakistan: the personal baggage scheme, the gift scheme, and the transfer of residence scheme. Under the proposed changes, the government is considering merging the personal baggage and gift schemes into a single streamlined process, while the transfer of residence scheme will remain separate. This move is designed to reduce duplication, increase transparency, and create a more straightforward system for car importers.
New Duty Structure for Older Vehicles
A key feature of the new policy is a phased duty structure for five-year-old used cars. Initially, these vehicles will be subject to an additional 40 percent duty, but the rate will gradually reduce by 10 percent each year, making older vehicles progressively more affordable over time. This gradual duty reduction is intended to balance the government’s need for revenue with affordability for buyers.
Concerns Raised by Lawmakers
Members of the National Assembly have expressed concerns regarding the impact of used car imports on Pakistan’s fragile foreign exchange reserves. Lawmakers such as Usama Ahmed Mela and Gul Asghar Khan have requested a detailed briefing on both used car and electric vehicle imports to better understand their economic implications.
Importers Seek Policy Revisions
A delegation of used car importers, led by industry representative Hassan Danji, presented several recommendations to policymakers. Importers argued that the Engineering Development Board (EDB) should not be involved in the commercial import process since imports and exports fall under the jurisdiction of the Ministry of Commerce. They also urged authorities to reconsider the 40 percent duty on five-year-old vehicles, calling for a more competitive and investor-friendly approach. Additionally, importers recommended establishing a joint working group with officials and stakeholders to create a policy that encourages fair trade while protecting consumer interests.
Division of Responsibilities Between Ministries
Despite these requests, the Secretary of Commerce clarified that the auto industry primarily falls under the Ministry of Industries and Production, while the Ministry of Commerce already manages an extensive workload related to trade and economic matters. As a result, any structural changes involving the automobile sector may require closer coordination between the two ministries.
Next Steps for Policymakers
To ensure the concerns of lawmakers and importers are properly addressed, the Standing Committee on Commerce has decided to forward the matter—along with recommendations—to the Standing Committee on Industries and Production for further review. This step highlights the government’s cautious approach as it works to balance the needs of overseas Pakistanis, local consumers, and the economy.
What This Means for Car Buyers and Importers
If implemented, the merged import schemes and phased duty structure will likely make it easier for overseas Pakistanis to bring cars into the country while offering more predictability for importers. At the same time, the government’s careful monitoring of foreign exchange reserves indicates that affordability and accessibility will be balanced against broader economic priorities.
The final policy decisions are still pending, but the proposed changes represent one of the most significant adjustments to Pakistan’s used car import system in years. Both overseas Pakistanis and domestic car buyers will be closely watching developments in the coming months.
