Pakistan’s Economic Coordination Committee (ECC), chaired by Finance Minister Muhammad Aurangzeb, approved changes to the Import Policy Order 2022. The amendments permit the commercial import of used vehicles.
Under the new rules, only vehicles under five years old can be imported until June 30, 2026. After this date, the age limit will be removed.
A 40% regulatory duty, in addition to existing customs duties, will be in effect until June 30, 2026. This duty will then be reduced by 10% each year, reaching zero by the 2029-30 fiscal year.
All imported vehicles must meet strict environmental and safety standards. These changes follow recommendations from the Tariff Policy Board, as shared by the Finance Division.
Read: Pakistan’s Trade Deficit Surges 44% in July 2025 as Imports Outpace Exports
The ECC also approved an Rs800 million technical supplementary grant for the Pakistan Virtual Asset Regulatory Authority (PVARA). The virtual meeting from New York included ministers Ali Pervaiz Malik, Rana Tanveer Hussain, and Sardar Awais Ahmad Khan Leghari. It also included senior officials.
Last month, former PAAPAM chairman Aamir Allawala warned that freer used vehicle imports could threaten Pakistan’s car assembly industry within two years. He noted that used cars already make up 25% of the local market (40,000 units per year). This is significantly higher than in India (0%), Vietnam (0.3%), or Thailand (1.2%). Pakistan’s import duties (50-100%) remain lower than India’s 125% or Thailand’s 80%.
In May 2025, the All Pakistan Car Dealers and Importers Association (APCDIA) facilitated the import of used vehicles through formal banking channels. This approach could reduce foreign exchange loss. It could also increase tax compliance and improve sales data transparency for the Federal Board of Revenue (FBR).
The ECC’s decision aims to strike a balance between trade openness and industry protection. It could reshape Pakistan’s auto market but faces concerns over potential job losses. While supporting a documented economy, the policy will undergo close review for its economic impact.
In summary, Pakistan’s ECC has allowed the import of used vehicles with a 40% duty until 2026. Industry warnings persist, but the move promises greater market transparency
