Pakistan is preparing a new five-year auto policy in consultation with IMF. The policy aims to reduce tariffs, allow easier vehicle imports, and make the auto sector more competitive.
Under the proposed plan, the average tariff is expected to decrease from 10.6 percent to 9.5 percent in the 2026–27 budget.
Further reductions are planned over the next few years, bringing the rate down to around 5.99 percent by 2030. Officials say this gradual approach will help balance market openness with local industry support.
The policy will introduce a new four-tier tariff structure with rates of 0 percent, 5 percent, 10 percent, and 15 percent. This system is designed to simplify duties and make the import process more transparent.
Another key feature of the plan is the gradual reduction of duties on used cars. Over time, these duties are expected to be brought down to zero, making imported vehicles more affordable for consumers.
At the same time, the government aims to support local manufacturing by improving production conditions and encouraging investment in the auto sector.
Lower tariffs and reduced regulatory duties are expected to help bring down vehicle prices and increase consumer choice.
Officials say the overall goal is to create a more open and efficient auto market while maintaining steady growth in local production.
Experts believe the policy could lead to better competition, improved quality, and more options for buyers in the coming years.