SRO for commercial import of used cars issued

Ministry of Industries will expedite approval of draft Motor Vehicle Industry Development Act, 2025

ISLAMABAD:

The Ministry of Commerce has issued a Statutory Regulatory Order (SRO) for the commercial import of used cars. The notification follows a decision of the Economic Coordination Committee (ECC), which directed the ministry to release the notification by the end of September 2025.

Earlier, the ECC set a deadline of October 15, asking the Ministry of Commerce to present final recommendations for personal baggage, transfer of residence and gift schemes for the import of used vehicles. While allowing the commercial import of used vehicles, the ECC directed the Ministry of Industries & Production to discuss with the Ministry of Parliamentary Affairs the legislative process for the draft Motor Vehicle Industry Development Act, 2025.

"We don't have any issue; we will start importing used cars," Ali Asghar Jamali, CEO of Indus Motor, told The Express Tribune while commenting on the commercial import of used vehicles. "Local industry will go down and all jobs will vanish," he said. During a recent meeting of the ECC, the Ministry of Industries, the Federal Board of Revenue and the Finance Division sought clarification on the continuation or discontinuation of the import of used vehicles under personal baggage, transfer of residence and gift schemes.

It was informed that the Ministry of Commerce had initiated consultation with stakeholders for ascertaining proposals to address the potential misuse of those schemes.

In response to a query, the Ministry of Industries stressed that the Engineering Development Board (EDB) had already adopted 17 WP-29 standards and was working to embrace additional standards in consultation with the domestic industry. The process will be completed by the end of September with an implementation mechanism through pre- and post-shipment inspection.

The Finance Division pointed out that a draft bill (Motor Vehicle Industry Development Act, 2025), submitted by the Ministry of Industries, had been cleared by the National Assembly standing committee. The chair directed the Ministry of Industries to expedite the approval of the draft legislation by parliament. The Ministry of Commerce revealed that Pakistan had agreed with the International Monetary Fund (IMF) to remove all quantitative restrictions on the commercial import of used vehicles in the first quarter of fiscal year 2025-26. Initially, this will apply to vehicles that are less than five years old, subject to compliance with the minimum environmental and safety standards. The restriction of five years will be lifted in July 2026.

It was agreed that tariff rates (incorporating the customs duty, the additional customs duty and the regulatory duty) for used vehicles would initially be set at 40% above the corresponding rate for new vehicles. The premium will be reduced by 10 percentage points every year to zero by 2029-30. The ECC was apprised that Serial No 10, Appendix-C of the Import Policy Order, 2022 prohibited the import of used vehicles with limited exceptions for the import of used bullet-proof vehicles, armoured security vans, firefighting vehicles, ambulances and other specific-utility or security-related vehicles.

The committee was told that the EDB/Ministry of Industries had indicated certain safety and environmental measures, which would be adopted for the commercial import of used vehicles. The Ministry of Commerce added that the National Tariff Policy board, in its meeting held on September 8, 2025, considered the imposition of additional duties on the commercial import of used vehicles. The board approved a 40% regulatory duty, in addition to the existing duties, which would be levied on less than five-year-old vehicles. The duty will remain in force until June 30, 2026, after which it will be reduced by 10 percentage points every year to zero by 2029-30.

The ECC considered a summary submitted by the Ministry of Commerce titled "Removal of Quantitative Restrictions on Commercial Import of Used Vehicles" and approved the proposal with following stipulations. Commercial imports shall be subject to environmental, safety and quality standards as well as testing and certification requirements prescribed by the EDB/Ministry of Industries. The ministry will notify the standards before September 30, 2025.