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The Government of Pakistan is preparing to impose strict curbs on the import of three-year-old used vehicles, particularly under the schemes available to Overseas Pakistanis. This move aims to prevent the misuse of import policies and to curb illegal hundi and hawala transactions that have reportedly been used by commercial importers.

The decision was discussed in an inter-ministerial meeting chaired by Commerce Minister Jam Kamal Khan. The meeting was attended by key government officials, including Special Assistant to the Prime Minister Haroon Akhtar Khan, and representatives from PAMA (Pakistan Automotive Manufacturers Association) and PAAPAM (Pakistan Association of Automotive Parts & Accessories Manufacturers).

Background: ECC’s Earlier Review and Concerns

Previously, the Economic Coordination Committee (ECC), chaired by Finance Minister Muhammad Aurangzeb, had reviewed a proposal from the Commerce Division to amend the Import Policy Order 2022. The amendments were meant to address misuse of the Personal Baggage, Transfer of Residence, and Gift Schemes (Appendix-E) that allow used vehicles to be imported by Pakistanis living abroad.

After consultations, the ECC had directed the Commerce Division to hold further stakeholder meetings and resubmit a refined proposal. The latest meeting followed this directive, focusing on restricting the schemes strictly to genuine Overseas Pakistanis.

Proposed Changes and Restrictions

According to official sources, the revised policy will require that any vehicle imported under these schemes must be registered in the name of the Overseas Pakistani for at least six months prior to their departure from the country of residence. This measure aims to eliminate the loophole exploited by unscrupulous traders who allegedly purchase expatriate passports and use hawala payments to import vehicles illegally.

An official revealed, “Many commercial importers misuse the system by paying around Rs 200,000 for the passport of a Pakistani living abroad, allowing them to import vehicles using illegal payment channels. These vehicles are then sold locally to buyers with undeclared income.”

Industry Reaction and Concerns

Representatives from PAAPAM raised alarms over the consistent inflow of used vehicles, emphasizing that it directly harms the local auto parts manufacturing industry. They argued that increasing imports reduces demand for locally assembled cars and discourages investment in the domestic auto sector.

PAMA echoed similar concerns, urging the Ministry of Commerce to promote local manufacturing and create a level playing field for local assemblers. They warned that excessive imports of used vehicles could stall Pakistan’s efforts to grow indigenous production capacity.

Policy Outlook and Next Steps

Commerce Minister Jam Kamal Khan confirmed that the Ministry is now refining the conditions for used car imports under the three schemes, balancing flexibility for genuine Overseas Pakistanis with measures to stop commercial exploitation. Once finalized, the revised summary will be presented to the Economic Coordination Committee for approval.

PAAPAM also raised concerns regarding the upcoming Auto Industry Policy 2026, suggesting that previous policies favored new assemblers with minimal local content while neglecting parts manufacturers. The association stressed that the upcoming policy should strengthen local vendors and not rely solely on imported vehicles.

Impact on Pakistani Automotive Market

If implemented, these new curbs will significantly affect the used car market in Pakistan, particularly for those relying on imports through Pak Overseas channels. The local car industry could see a gradual boost as Car Advisers and other automotive platforms focus on promoting transparency, car inspections, and reliable used car listings within Pakistan.

For genuine Overseas Pakistanis, however, the government may introduce facilitation measures to ensure fair access without encouraging exploitation.

Final Thoughts

As Pakistan navigates economic reforms and foreign exchange constraints, curbing illegal trade practices like hawala in the auto sector has become essential. These new restrictions aim to balance the interests of Pak Overseas citizens and local industry stakeholders.

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FAQs

Q1: Why is the government restricting the import of used vehicles for Overseas Pakistanis?

The government aims to prevent misuse of import schemes by commercial importers and stop illegal hundi/hawala transactions used to pay for vehicles imported under false identities.

Q2: What is the new condition for importing vehicles under the Transfer of Residence scheme?

The vehicle must be registered in the name of the genuine Overseas Pakistani for at least six months before leaving their country of residence.

Q3: How will this policy affect the used car market in Pakistan?

The restrictions may reduce the number of imported used cars, potentially increasing demand for locally assembled and inspected vehicles available through platforms like Car Advisers.

Q4: How much is Rs 200,000 in USD?

As of current rates, Rs 200,000 equals approximately USD 720.

Q5: Where can I find reliable used cars online in Pakistan?

Continue Exploring on CarAdvisers

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