Pakistan intends to connect its car sector with worldwide supply chains, boost shipments abroad, and lower duties through the newly drafted Auto Policy 2026-31. The document details rewards for domestic component makers, export goals, tax changes, and tougher safety rules to boost market strength.
Authorities want to raise domestic value creation, cut reliance on foreign parts, and lower car prices. The strategy also seeks to lift vehicle standards and help local producers rival foreign competitors.
The text suggests lowering the total weighted average duty to under 6 percent by 2030. It additionally asks for phasing out Statutory Regulatory Orders tied to the car industry and taking out automobile duties from the Fifth Schedule of the Customs Act, 1969.
Auto Policy Targets Exports and Local Manufacturing
Pakistan car shipments reached $190 million during fiscal year 2025-26, the document shows. Authorities plan to grow foreign sales using export rewards and required goals, moving away from duty protection toward results-based backing.
More than 2,200 component makers function across the country, the text notes. The car industry adds roughly 4.5 percent to large-scale production and offers jobs to about 2.5 million individuals directly and indirectly.
The sector additionally yields over Rs. 784 billion in yearly taxes.
For greener transport, the suggested rules bring tax perks for new energy cars, such as electric models, via a reduced general sales tax and potential relief from other fees and duties.
An Auto Development Levy on standard cars with bigger engines is also suggested.
Authorities intend to price compact cars lower while safeguarding buyers via enhanced quality and safety mandates.
The document points to weak domestic value addition as a key obstacle, urging higher local part creation to cut foreign reliance.
Government Plans Tougher Vehicle Safety Rules
The text suggests taking on 45 extra WP.29 car rules by 2029 and setting up a legal system to enforce safety norms properly.
It furthermore requests an outside check of all import permits granted by the Engineering Development Board along with complete digital updates to internal office systems to raise openness and administrative speed.
A steering committee led by the minister for industries and production would watch over policy execution. The ideas stay open to final government choices.
The suggested system works to raise shipments, lift output, cut car costs, and better Pakistan standing abroad by mixing duty changes with domestic production and results-based perks.
