- Pakistan will now allow used cars and spare parts to be imported temporarily for repair and refurbishment.
- These vehicles cannot be sold in the local market and must be exported back out of the country after being fixed.
- The government will run this scheme for one year to see how it helps the local auto industry.
The federal government has just opened a new door for the automotive industry. The Finance Minister Muhammad Aurangzeb chaired a meeting on Monday, May 4, 2026. In the meeting, the Economic Coordination Committee (ECC) approved a new project. This scheme allows businesses to bring used cars and auto parts into Pakistan. They must be refurbished and then exported to other countries.
The Rules of the Game
To make this work, the government had to change the Import Policy Order 2022 and the Export Facilitation Rules. However, there are strict no-go areas to protect the local market
- The government has set a strict condition that these cars and parts are not for domestic sale.
- This is currently a pilot project. It will be reviewed in one year to see if it is working well before the government decides to continue or expand it.
- The focus is on value addition. This means the cars must be improved or fixed significantly before they leave the country again.
Why Is the Government Doing This?
By allowing this model, the government wants to encourage industrial activity and create jobs in the automotive sector. It gives local mechanics and auto workshops a chance to work on international standard vehicles. It can help modernize our local skills. It also helps the country earn foreign exchange since these cars will eventually be sold in dollars to international buyers.
This move is part of a larger plan to regulate the auto sector more tightly while still finding ways to grow. The government had recently made it harder for people to import cars for personal use. But now it is creating new ways by which businesses can contribute to Pakistan’s exports.
