Minister Finances Explains the Salient Features of Auto Industry Development and Export Policy

The federal Minister for Finance and Revenue, Shaukat Tarin, presided over a meeting to review a draft Auto Industry Development and Export Policy (AIDEP) 2021-2026.

The Secretary of the Ministry of Industries and Production briefed the attendees about the salient features of the draft AIDEP 2021-26. The vision for the AIDEP will be to make Pakistan a hub for the competitive manufacturing of auto parts and vehicles for local markets and exports.

The key focus is to strengthen the competition among locally manufactured vehicles in order to provide high-quality vehicles at affordable prices to the consumers in the country. It also includes an increase in the exports of automobile parts and vehicles to earn valuable foreign exchange.


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Minister Tarin stated that the proposed Auto Industry Development and Export Policy (AIDEP) aims at the expansion of the auto industry in Pakistan by increasing the production of cars, motorcycles, tractors, etc.

The topmost priority is to ensure consumer welfare through the availability of cars at affordable rates for the middle and lower-income groups. With this view, the government has provided major relief to the consumers by reducing the sales tax on 850cc cars along with exemption from value-added tax in the Federal Budget 2021-22.

The Ministry of Industries and Production, Khusro Bakhtiar, confirmed that prices of vehicles have been reduced commensurate with the reduction in taxes, and that the industry has widely publicized it for the information of the general public. The policy will encourage the exports of vehicles and automobile parts.

Minister Tarin also underscored the importance of Electric Vehicles (EVs) and affirmed the provision of incentives for the development of the EV market in Pakistan, including EV charging infrastructure. The promotion of EVs will reduce the dependence on the oil import bill and promote environment-friendly options.

He also stressed coming up with innovative products for the provision of car financing at a reduced mark-up to consumers so that everyone can afford a car at flexible terms and conditions.


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Minister Bakhtiar said that new entrants may be encouraged in the auto sector, particularly for EVs. This, in turn, will encourage auto companies to invest in related infrastructure in Pakistan.

The Advisor to the Prime Minister on Commerce, Abdul Razak Dawood, stated that the existing tariff structure needs to be rationalized (in a phased manner) to promote the auto industry in Pakistan while keeping in view the objective of localization, which is to encourage the local auto industry to come up with high-quality vehicles in an affordable range.

In his concluding remarks, the Minister of Finance emphasized broad-based consultation with the key stakeholders on board to devise an all-encompassing and futuristic auto policy.

SAPM Dr. Waqar Masood, the Secretary of the Finance Division, the Secretary of Commerce, the Chairman of the Federal Board of Revenue (FBR), and other senior officers attended the meeting.