Gaps Remain in Pakistan’s Commercial Car Import Plan

The Ministry of Finance recently announced via social media post that Pakistan will now permit the commercial import of used vehicles up to five years old (previously three years) at an additional duty of 40%. While this decision has generated interest in the automotive industry, it has also left several important questions unanswered. Read on to find out more and satisfy your curiosity about this new development.

Here’s the snapshot of the original post by the Ministry of Finance:

What’s Actually Changing?

The Missing Important Pieces by the Government

Here’s where the policy falls short:

  1. No Official Notification Yet
     The announcement exists only as a social media post. Until an official bill/law/amendment, or official document is issued or passed, this policy isn’t legally enforceable.
  2. Vague Environmental Standards
    In a social media post, the government stated that cars must meet environmental and safety standards. But who will test them, how the government will test them, and under which standard will they be tested? Nobody knows. Although Pakistan follows the WP.29 global vehicle regulations, the government hasn’t clarified whether used imports will be tested against these regulations or another standard.
  3. No Timeline Provided
     The Ministry hasn’t shared when the new rules will take effect, leaving businesses unsure whether they can start imports immediately or wait for official instructions.
  4. Transparency Gap
     Without documentation, there’s no framework for customs clearance, valuation, or dispute resolution, a recipe for confusion at ports and unnecessary delays.

Winners and Losers in the New Policy

Stakeholder Likely Impact What It Means
Consumers Mixed Wider choice of JDMs and hybrids, but prices remain high due to 40% duty. Genuine relief only comes once duty phases down.
Importers and Dealers Opportunity with Risk Expanded supply options, but legal uncertainty means cars could get stuck at port until clear rules are issued.
Local Manufacturers Threat More competition from used hybrids and mid-tier imports. Expect industry lobbying to push back.
Workshops and Aftermarket Winner Used imports = more demand for parts, repairs, inspections, and hybrid servicing.
Government Revenues Short-Term Gain The 40% surcharge ensures immediate revenue, but unclear rules may discourage local partners

 

Why This Matters for Pakistan’s Business Community

  1. Auto Market Competition
     Local assemblers, already struggling with low sales, will now face pressure from imported hybrids and used SUVs. This could shift market share and alter pricing strategies. 
  2. Foreign Exchange and Balance of Payments
     More used imports mean higher demand for dollars. Without parallel export growth, the policy could widen Pakistan’s trade deficit. 
  3. Consumer Sentiment
     Car affordability has collapsed in recent years. Even with duties, used imports could offer better value-for-money than overpriced local options, restoring buyer confidence in the market. 
  4. Policy Credibility
     Businesses need predictability. Announcing major reforms via social media without an officially passed bill or act weakens trust in policymaking. Importers and dealers may hesitate to commit until clarity arrives. 

The Bottom Line

The new used car import policy could reshape Pakistan’s auto sector, but right now, it’s more signal than substance. Until the government issues a formal notification with clear rules and testing standards, the uncertainty will discourage real action.

For businesses, the next few weeks are critical: either the government shores up this policy with proper legal backing, or it risks becoming another half-implemented reform lost in bureaucratic limbo.

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