Govt delays approval of used car imports to protect local industry 

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has held off on approving a proposal to allow the import of used vehicles under special schemes for overseas Pakistanis, citing the need for further review and consultations. 

The meeting, chaired by Finance Minister Muhammad Aurangzeb on Friday, was expected to decide on amendments to the rules governing car imports through the Personal Baggage, Transfer of Residence, and Gift Schemes. However, after detailed discussions, the ECC directed the Commerce Division to re-examine the proposal in consultation with stakeholders before bringing it back for approval. 

Car import debate gains traction 

Sources familiar with the matter said the deferred decision reflects the government’s cautious stance as it weighs the benefits of easing restrictions for overseas Pakistanis against potential challenges for the local automobile industry and the country’s limited foreign reserves. 

While proponents of the relaxation argue that overseas Pakistanis deserve greater facilitation, particularly given the long wait times and rising prices for new locally assembled vehicles, critics warn it could trigger a surge in foreign exchange outflows and undermine local manufacturing. 

The Ministry of Commerce had suggested revising the existing import procedure to streamline documentation and make the process more transparent. The proposal also included measures to simplify clearance through accredited pre-shipment inspection agencies as part of the Import Policy Order 2022. 

However, the ECC decided that more analysis was needed, particularly regarding the volume of imports expected under the revised policy and its possible impact on domestic production and revenue generation. 

Inflation and food prices under review 

The committee also reviewed the current inflation trends, with the Ministry of Planning presenting a detailed report on rising food prices. Chief Economist Dr Imtiaz Ahmad noted that inflation surged to 5.6 percent in September, largely because of flood-related damage to crops and livestock. Prices of essentials such as sugar, beef, and cooking oil have increased, though chicken and rice have become cheaper. 

Finance Minister Aurangzeb urged federal and provincial authorities to improve coordination and ensure timely interventions to stabilise prices, especially ahead of the Ramazan season. 

Other decisions 

The ECC approved several technical supplementary grants amounting to Rs3.089 billion for different ministries. These included Rs2.5 billion for establishing the Pakistan Maritime Science and Technology Park under the Pakistan Navy, Rs455.98 million for conducting local government elections in 2025–26, and Rs21.5 million for the maintenance of Pakistan Rangers’ helicopters. 

The committee also approved measures to tighten monitoring of precious metal and jewellery trade, aiming to improve transparency and traceability. 

The ECC is expected to revisit the used car import proposal once the Commerce Division finalises its revised plan after stakeholder consultations. The outcome could determine the future of imported used cars in Pakistan, a market that continues to attract strong demand amid rising costs of new vehicles.