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Tariffs

Pakistan Relaxes Import Restrictions on Older Vehicles

Strategic Insights

— 1 min read

The Pakistani government has announced significant changes to its ban on importing older vehicles, allowing the commercial import of vehicles up to five years old from September 2025. This move is part of broader trade reforms aimed at expanding consumer choices and boosting revenue through controlled imports. The new policy, which will be effective from July 1, 2025, is expected to lower trade barriers by phasing out Additional Customs Duties (ACDs), reducing Regulatory Duties (RDs) by 80%, and simplifying customs rules.

Key Takeaways:

  • The Pakistani government has approved the commercial import of vehicles up to five years old from September 2025, as part of the new National Tariff Policy (NTP) 2025-30.
  • The duty on imported vehicles will be reduced by 10% each year, and completely removed in the coming time.
  • The government has also planned to expand allowing imports of vehicles up to 7 years old, ending the existing restriction on importing vehicles over 3 years old.
  • The reforms will also include a 40% additional duty on imported vehicles, which will be cut by 10% each year and completely removed by 2030.
  • The auto sector will undergo major changes under a new auto policy from July 2026, with significant cuts to import duties and the removal of all RDs and ACDs.
  • Import restrictions on used vehicles (under five years old) will be lifted in FY26, replaced by environmental and safety standards from July 2026.

Statistics:

  • 40% of additional duty will be imposed on imported vehicles under the new scheme.
  • The duty will be cut by 10% each year.
  • Tariffs on used vehicles will be set 40% higher than those on new cars.
  • The premium decreasing by 10 percentage points annually will be eliminated by 2030.
  • The average tariff rate will be reduced from 10.6% to 7.4% by FY2030.
  • 80% of Regulatory Duties (RDs) will be reduced as part of the new policy.

Sources:

  • "Pakistani government announces changes to ban on importing older vehicles" - Ministry of Commerce, Senate Standing Committee on Finance briefing
  • "Pakistani government reaches understanding with IMF to gradually lift restrictions on used car imports" - IMF, National Tariff Policy (NTP) 2025-30
  • "Pakistan to launch new auto policy from July 2026" - Ministry of Commerce, National Tariff Policy (NTP) 2025-30

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