The federal government of Pakistan has shared new plans that could bring big changes to the local car market. According to officials, tariffs in the auto sector are being redesigned under the National Tariff Policy (NTP), which may lead to a significant reduction in car prices across the country.
Commerce Secretary Jawad Paul informed the National Assembly Standing Committee on Finance that if the policy is fully implemented, customs duties on cars, jeeps, and auto parts could be reduced by 25 to 50 percent. This step may bring the maximum overall tariff rate down from 156 percent to around 74 percent.
If these changes are approved, it could make imported and locally assembled cars more affordable for buyers in Pakistan. However, it may also increase competition for local car manufacturers, who might face pressure from cheaper imported vehicles.
Officials also said that there is currently no change in the approved tariff roadmap, and the second-year reforms include reductions across thousands of tariff lines. Duties on many products are expected to decrease gradually under the plan.
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However, the proposal is still under discussion within the government. Some concerns have been raised by different departments, and the International Monetary Fund (IMF) has not fully supported certain parts of the plan.
One of the main issues is how fast and how much the tariffs should be reduced. The government is also working under tight deadlines, as the current auto policy is set to expire on June 30. Budget and approval processes are also ongoing.
The Commerce Secretary further added that the proposed tariff cuts in the second year could reduce government revenue by around Rs. 143.4 billion.
Overall, if the plan moves forward, it could bring relief for car buyers in Pakistan, but it also raises important questions about local industry protection and government revenue balance.
