ISLAMABAD (Kashmir English): The federal government is set to introduce sweeping reforms in the automobile sector under its upcoming five-year auto policy.
This policy includes the elimination of duties on imported vehicles to make cars more affordable and boost competition.
The draft of the policy will be shared with the IMF for its approval and then officially announced. It is pertinent to mention that the proposed five-year auto policy suggests gradually removing the import duties from automobiles, but the customs duty should not exceed 15 percent over the next five years.
The policy also proposes simplifying the structure of import duties into four tiers, including 0 percent, 5 percent, 10 percent, and 15 percent.
Moreover, the policy will also include strict implementation measures concerning the vehicle’s safety standards and licensing requirements.
The proposed policy framework will take effect on July 1, 2026, with an ultimate aim of enhancing the local manufacturing capabilities of Pakistan and making automobiles cheaper through localization.
According to the policy, there would be a regulatory duty of 40 percent in FY 2026, which would be gradually reduced to zero in the following fiscal year.
According to Prime Minister’s Adviser on Industry Haroon Akhtar Khan, this policy document is almost finalized.
He emphasized that all consultations with the stakeholder organizations have taken place in order to reach a consensus, and the draft policy is about to be presented before the PM Shehbaz Sharif and his Cabinet colleagues for approval.
Upon approval, the policy is considered a major milestone in Pakistan’s automobile sector because it will facilitate open competition within the auto industry.
