Government Decides to Impose New Restrictions on Used Car Imports
Islamabad — The Pakistani government has decided to tighten regulations on the import of used cars, particularly vehicles imported through overseas Pakistanis. Under the new proposal, the import of used cars older than three years will be banned.
According to Business Recorder, the decision was made during an inter-ministerial meeting chaired by Minister for Commerce Jam Kamal Khan. The move is part of the government’s efforts to prevent misuse of import schemes and curb illegal money transfers through hundi and hawala channels — informal systems often used to bypass official banking routes.
Focus on Misuse of Overseas Pakistani Schemes
For years, Pakistan has allowed citizens living abroad to import vehicles under three specific schemes: personal baggage, transfer of residence, and gift scheme. However, officials say these provisions have been widely misused by traders who exploit the names of overseas Pakistanis to bring in used vehicles for commercial purposes.
To address this, the government has decided that these schemes will now be strictly limited to genuine expatriates who can prove they reside abroad. In addition, any imported car must be registered in the name of the overseas Pakistani at least six months before shipment from the country of residence.
Local Auto Industry Backs the Move
The meeting was also attended by Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan, along with representatives from the Pakistan Automotive Manufacturers Association (PAMA) and auto parts manufacturers.
Local industry representatives argued that the inflow of used cars has reduced demand for locally manufactured vehicles and spare parts, negatively affecting employment and industrial output. They urged the government to discourage imports in order to protect domestic manufacturing and encourage new investment in the automotive sector.
Pakistan’s auto industry, valued at around Rs. 1.2 trillion, provides direct and indirect employment to over 3.5 million people, according to PAMA. Industry players believe that stricter import controls could help stabilize production and boost confidence among investors.
Next Steps: Approval from the Economic Coordination Committee
Following detailed discussions, officials agreed that a revised summary containing the proposed restrictions will be prepared and submitted to the Economic Coordination Committee (ECC) for formal approval.
The Ministry of Commerce emphasized that these changes are not intended to penalize overseas Pakistanis but to promote transparency and ensure that import schemes serve their original purpose.
Analysts note that Pakistan, facing persistent foreign exchange shortages, is seeking to reduce its import bill. Restricting used car imports could help save millions in foreign reserves while strengthening local industries.
This decision aligns with Punjab’s new vehicle emission policy, which bans vehicles without green stickers from November 15 to curb pollution and promote environmental compliance.
