KARACHI: The Ministry of Commerce has amended the Import Policy Order 2022, banning the import of used cars under the “personal baggage scheme.” The decision was notified through SRO 61(I)/2006 issued on Wednesday. Under the revised policy, used vehicles may now be imported only through the “gift” and “transfer of residence” schemes.
Cars imported under either scheme will remain non-transferable for one year from the date of import. Additionally, vehicles brought in under the transfer of residence scheme must originate from the same country where the overseas Pakistani resides.
The ministry has also extended the import timeframe under the transfer of residence scheme to 850 days, up from the previous 700 days, calculated from the date of filing the Goods Declaration for the last import under the order. The SRO further states that minimum safety, environmental, and regulatory standards—already applicable to the commercial import of used vehicles and notified by the Ministry of Industries and Production or the Engineering Development Board (EDB)—will also apply to vehicles imported under the gift and transfer of residence schemes.
Earlier this month, the Federal Cabinet ratified an Economic Coordination Committee (ECC) decision taken on December 9, 2025, allowing overseas Pakistanis to import used vehicles up to three years old under the two remaining schemes. All Pakistan Motor Dealers Association (APMDA) Chairman H.M. Shahzad expressed concern over the outlook for used car imports in 2026. He pointed out that Pakistan imported around 40,000 used cars in FY25 and 18,000 units during the first half of FY26.
According to him, the abolition of the personal baggage scheme and tighter restrictions on the remaining schemes have created uncertainty for overseas Pakistanis and stakeholders in the motor import business. He warned that the government could lose millions of dollars in duties and taxes, noting that used car imports generated about $500 million in revenue in FY25. He also criticised what he described as “unreasonable” conditions imposed on the commercial import of vehicles.
Mr Shahzad added that small cars of up to 660cc account for about 90 per cent of used vehicle imports, with 99 per cent of these coming from Japan. Previously, he said, nearly all used car imports arrived under the personal baggage scheme. On commercial imports, he noted that while standard operating procedures are still being finalised, the government has already imposed a 40 per cent regulatory duty on used cars up to five years old until June 30, 2026, in addition to existing duties. This regulatory duty is set to be reduced by 10 per cent annually from FY27, reaching zero by FY30.
Meanwhile, Pakistan Association of Automotive Parts and Accessories Manufacturers Chairman Usman Aslam Malik and Senior Vice Chairman Shehyar Qadir said on January 12 that regularising used car import schemes would help restore their original purpose for genuine overseas Pakistanis while protecting the local automotive and auto parts industry.
