New curbs likely on used car imports to prevent abuse of expat schemes

ISLAMABAD: The government is considering a fresh clampdown on the import of three-year-old used cars by overseas Pakistanis after reports that the facility is being misused and linked to illegal money transfers through hundi and hawala networks.

The move was discussed during an inter-ministerial meeting held on Wednesday, chaired by Minister for Commerce Jam Kamal Khan. The session was attended by Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan, along with representatives from the Pakistan Automotive Manufacturers Association (PAMA) and the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM).

Schemes to be limited to genuine expatriates

Sources told Business Recorder that the meeting agreed to tighten the Personal Baggage, Transfer of Residence, and Gift Schemes, ensuring they are used only by genuine Overseas Pakistanis living abroad. Under the new conditions, any imported vehicle would have to be registered in the name of the concerned expatriate at least six months before their return to Pakistan.

The Ministry of Commerce and the Ministry of Overseas Pakistanis were reportedly open to a more lenient approach, but the Ministry of Industries took a firm stance against the existing flexibility. Officials argued that the schemes are being misused by traders posing as expatriates.

“Unscrupulous dealers buy passports of overseas Pakistanis for around Rs200,000 and use their identities to bring in vehicles through hawala channels. These cars are then sold to buyers with undeclared income who avoid purchasing locally assembled vehicles,” one official said.

Industry concerns and upcoming policy

PAAPAM representatives raised concerns that rising imports of used cars were hurting local manufacturers by reducing demand for domestically produced parts. They urged the Commerce Minister to introduce stronger measures discouraging the import of used vehicles.

The minister informed participants that the Economic Coordination Committee (ECC) had earlier instructed the Commerce Division to revise and consult on proposed amendments to the Import Policy Order 2022. The ministry is now reworking its proposal before presenting a final summary to the ECC for approval.

PAAPAM also called for fair treatment in the upcoming Auto Industry Policy, warning that previous policies favoured new assemblers while neglecting local vendors. The association asked that the next policy, due after June 2026, should better protect the domestic parts industry.