The government is considering sweeping changes to Pakistan’s used car import framework, including a proposal to abolish the Personal Baggage Scheme entirely. The move is part of a wider effort to slow the heavy inflow of secondhand vehicles into the country.
A summary submitted by the Ministry of Commerce to the Economic Coordination Committee (ECC) recommends ending the Personal Baggage option while tightening regulations on the remaining Transfer of Residence and Gift Schemes in order to curb misuse.
Industry figures show a rapid comeback of used vehicle imports beginning in December 2024, a spike that has drawn criticism from local auto manufacturers. Executives argue Pakistan’s current approach is out of step with regional markets, where used imports are heavily restricted. India allows virtually none, while Vietnam and Thailand have shares of just 0.3% and 1.2%, respectively.
The auto sector warns that Pakistan’s liberalized approach — especially since a September 2025 notification allowing imports of cars up to five years old — could jeopardize domestic production networks. Concerns have also surfaced that after June 2026, the age cap on imports could be removed, opening the door to even older units.
Pakistan’s automotive chain includes around 1,200 factories, supports roughly 2.5 million jobs, contributes an estimated Rs. 500 billion in government revenue each year, and has attracted nearly $5 billion in foreign investment. Industry leaders are urging policymakers not to undermine these gains.
Between December 2024 and October 2025, Pakistan imported 45,758 vehicles, almost 99% from Japan. Imports from other countries remained small: 130 units from Thailand, 55 from the United States, and limited volumes from Jamaica, Germany, Australia, China, and the UAE.
Vendor industries estimate losses of around Rs. 50 billion during this period. A comparison of foreign-exchange data shows local manufacturers require about $10,138 per vehicle through documented banking channels, while used car imports average $14,010 per unit, much of it through informal routes.
As the government works on a revised Auto Policy aimed at supporting local manufacturing and deeper localisation, policymakers are weighing whether liberal used-car imports can coexist with domestic industrial growth.
The ECC is expected to review the ministry’s proposals and announce its decision in the coming weeks.
