The government is considering abolishing the Personal Baggage Scheme for used car imports and plans to tighten regulations on the two remaining schemes, as part of a broader effort to curb the influx of secondhand vehicles.
According to a report by a national daily, the Ministry of Commerce has submitted a summary to the Economic Coordination Committee (ECC) of the cabinet, recommending the discontinuation of the Personal Baggage Scheme while proposing stricter controls on the Transfer of Residence and Gift Schemes to prevent misuse.
Industry data shows a sharp resurgence in used-vehicle imports since December 2024, a trend that has drawn strong opposition from the domestic auto sector. Local manufacturers argue that Pakistan’s approach stands in stark contrast to regional peers, where used-car imports are tightly restricted: India allows virtually none, Vietnam’s share is just 0.3 percent, and Thailand’s is 1.2 percent.
The sector warns that Pakistan’s more liberal policy, especially after a September 2025 notification allowing imports of vehicles up to five years old, could undermine the country’s automotive value chain. There are concerns that after June 2026, the age limit on imports may be lifted entirely, potentially opening the door to a flood of older vehicles.
Pakistan’s auto industry, which comprises around 1,200 factories, supports 2.5 million jobs, generates an estimated Rs. 500 billion in annual government revenue, and attracts about $5 billion in foreign investment, is urging the government to reconsider.
Between December 2024 and October 2025, Pakistan imported 45,758 vehicles, with nearly 99 percent coming from Japan. Imports from other countries were minimal, including 130 units from Thailand, 55 from the US, and smaller numbers from Jamaica, Germany, Australia, China, and the UAE.
Industry estimates suggest local vendor industries lost about Rs. 50 billion during this period, while the foreign-exchange impact is also significant: local manufacturers require about $10,138 in documented banking-channel imports per vehicle, compared to $14,010 per unit for used-car importers, much of it through informal channels.
As the government drafts a new Auto Policy aimed at strengthening domestic manufacturing, the debate continues over whether localization efforts can succeed alongside a liberal used-car import regime.
The data suggests Pakistan is an outlier among manufacturing economies, both in its policy direction and market outcomes. The ECC is expected to make a final decision on the proposed changes in the coming weeks.
Great to see that we are comparing data of import with the peer countries, at the same time, had the quality of peer countries been looked into would have been appreciated, you cant compare your donkey car with the peer countries, specially Suzuki and Honda cars, what they are producing in these countries and are being made in Pakistan, a huge difference not only in terms of build quality but features and buying options as well
Pmln is an enemy of lower middle class. Most auto companies are only producing SUVs or very expensive Sedans and most Pakistanis cannot afford those cars. But government wants to strengthen this SUV mafia by ending used car imports. Shame on pmln as a whole.
People prefer to buy old cars compared to local junks.
Allow tax free Small EVs
The local mafia is comparing themselves to India where the local manufacturers have great quality and diverse range of fully localized cars. The local industry in Pakistan themselves imports the entire car from outside Pakistan then why can’t individuals import a better quality vehicle themselves?
Without proper deliberation, with relevant
Stakeholders, policies are announced.
After few months again policies are changed without proper reason.
It is a shame that after spending a lifetime overseas and earning much needed foreign exchange for the country an overseas Pakistani have to pay 100% or more in taxes and duties to import a vehicle for his personal use and now the incompetent Pakistani auto industry wants to get away by taking that privilege.
Used personal vehicles are too expensive in this country because of non existing competition, you should open up the market to competition and let the auto makers compete for their shares.