ISLAMABAD: The government on Wednesday revisited the issue of used car import schemes and their possible misuse under the baggage, gift, and transfer of residence systems, as local auto manufacturers expressed serious concerns that these concessions are being exploited for commercial imports at the cost of Pakistan’s struggling auto industry.
As per details the matter came under review at a high-level meeting co-chaired by Commerce Minister Jam Kamal Khan and Special Assistant to the Prime Minister on Industries Haroon Akhtar Khan, attended by representatives of PAMA (Pakistan Automotive Manufacturers Association) and PAAPAM (Pakistan Association of Automotive Parts & Accessories Manufacturers).
The discussions took place just days after the Economic Coordination Committee (ECC) had deferred approval of proposed amendments to these vehicle import schemes, following sharp differences among stakeholders over the stringent conditions proposed by the Ministry of Commerce. The ECC directed the ministry to hold further consultations with all parties and resubmit the proposal.
Officials familiar with the deliberations said the government is seeking to tighten eligibility under the baggage and gift schemes, which allow overseas Pakistanis to send vehicles to relatives or bring them back upon returning home. These schemes, meant for personal facilitation, have long been used as a channel for commercial car imports, undercutting locally assembled vehicles.
Under the existing framework, an overseas Pakistani must have stayed abroad for at least six months to qualify for importing a car under the baggage scheme. However, the Commerce Ministry has proposed increasing this requirement to three years, with a minimum cumulative stay of 850 days abroad, and making imported vehicles non-transferable for one year.
The Ministry of Industries has gone further, proposing to abolish the gift and baggage schemes entirely, leaving only the transfer of residence option, while the Commerce Ministry argues for retaining all three but with stronger safeguards. The FBR has cautioned that overly strict measures could effectively halt all imports, especially since most Pakistanis abroad live in left-hand-drive countries.
At Wednesday’s meeting, local auto assemblers and parts manufacturers reiterated their opposition to the unrestricted inflow of used cars, warning that it discourages investment, hurts employment, and undermines localization efforts. “These schemes were meant for genuine expatriates, not for dealers using passports to import vehicles commercially,” one industry representative said.
Commerce Minister Jam Kamal Khan assured participants that the government aims to strike a balance between facilitation and regulation, ensuring genuine overseas Pakistanis are not affected while closing loopholes that allow misuse. He said the introduction of pre- and post-shipment inspection systems would help improve compliance and quality standards.
SAPM Haroon Akhtar Khan urged the auto sector to share its proposals for the upcoming Automotive Policy, expected to be finalized by November, emphasizing that close coordination between commerce and industry divisions was crucial for a competitive and sustainable auto ecosystem.
Industry sources said the government’s handling of the baggage car import schemes will be a key policy test, as it tries to balance consumer demand, industrial protection, and overseas Pakistani facilitation.
