ISLAMABAD – The Economic Coordination Committee (ECC) of the Cabinet has approved changes to the Import Policy Order 2022, allowing the commercial import of used vehicles under strict conditions.
According to the Finance Division, the decision was made during an ECC meeting chaired virtually by Federal Finance Minister Muhammad Aurangzeb from New York. The meeting was also attended by Federal Ministers Ali Pervaiz Malik, Rana Tanveer Hussain, Sardar Awais Ahmad Khan Leghari, and senior government officials.
Under the new policy, only vehicles less than five years old can be imported commercially until June 30, 2026. After this date, there will be no age limit for imported vehicles.
The ECC also approved the imposition of a 40% regulatory duty, in addition to existing customs duties, on used vehicles under five years old. This duty will remain in place until June 2026 and will then be gradually reduced by 10 percentage points each year, reaching zero by the fiscal year 2029-30.
The committee stressed that all imported vehicles must strictly comply with environmental and safety standards.
Additionally, the ECC approved a technical supplementary grant of Rs800 million for the Pakistan Virtual Asset Regulatory Authority (PVARA). These decisions will now be sent to the federal cabinet for final approval.
Last month, local auto parts manufacturers expressed concerns over the government’s plan to liberalise used car imports.
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Former chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), Aamir Allawala, warned that Pakistan’s car assembly industry could shut down within two years if commercial imports of used cars are allowed.
He highlighted that used cars already make up 25% of the local market, with over 40,000 units imported annually. In comparison, used car imports are negligible in other countries: India (0%), Vietnam (0.3%), and Thailand (1.2%).
Allawala also pointed out that import duties on completely built-up (CBU) units in Pakistan currently range from 50% to 100%, compared to 125% in India, 52% in Vietnam, and 80% in Thailand, adding that these higher duties and strict controls in other countries keep used car imports low.
Meanwhile, the All Pakistan Car Dealers and Importers Association (APCDIA) has been urging the government to allow the import of used cars under certain conditions and through banking channels. The association argues that this would reduce foreign exchange outflows through illegal markets, promote transparency, and increase tax compliance as all importers would be required to submit sales data to the Federal Board of Revenue (FBR).
