Pakistan Auto Policy 2026-31: Parts Makers Concerned

Pakistan’s next auto policy may bring lower duties on imported vehicles and parts, but local parts makers are warning that the plan could hurt localization and future investment. reportedly the Auto and Auto Parts Policy 2026-31 is still a draft and has not been officially notified, so the numbers being discussed may still change.

The reported policy has already stirred debate because it aims to make imported cars and new energy vehicles cheaper while also pushing the industry to export more. For buyers, that could mean more choice and stronger price competition. For local vendors, it could mean tougher times if imported parts become cheaper than parts made in Pakistan.

What the reported draft says

Reportedly, the draft also proposes just 1% customs duty on some non-localized NEV parts, including batteries, motors and controllers. That is where many local vendors see the biggest risk.

Why parts makers are worried

The concern is simple: if imported components become cheaper than local ones, automakers may prefer imports over Pakistani suppliers. That could reduce demand for local vendors and weaken the business case for new factory upgrades.

Industry people fear the policy may slow down localization at a time when Pakistan still needs more local sourcing, more technical know-how and steadier order volumes. They also worry about jobs and the wider supplier network if assemblers lean more on imported kits and parts.

The draft’s reported NEV localization target also looks modest to many in the supply chain. The minimum domestic value addition requirement is said to be 10% in the first two years, 15% in years three and four, and 20% in year five. That may not be enough, vendors argue, to force real local production of key EV parts.

For more background on the policy debate, see Pakistan Auto Policy 2026-31 Delayed due to IMF rejection and Pakistan Auto Policy 2026-31 on Hold: Hybrid Tax Shock.

What it could mean for buyers

For car buyers, the draft could bring one clear gain: more imported models, especially lower-priced NEVs, may become easier to bring in. If competition rises, some prices could soften, especially in the entry-level EV space.

But savings are not guaranteed. Exchange rates, freight, taxes, after-sales support, charging access, spare parts and resale value will all affect the final price a buyer pays. Even if duties fall, the benefit may not fully reach the showroom floor.

That is why buyers with an urgent need should not stop a planned purchase just because a draft policy is being discussed. But those thinking about an imported EV, or a high-priced vehicle, may want to wait for the final notification before making a decision.

What is still uncertain

Reportedly, multiple draft versions are still circulating. The policy was approved in principle by Prime Minister Shehbaz Sharif in September and was later reportedly sent for IMF review, but the government has not officially notified the final text.

That means duty rates, sales tax, NEV thresholds, timelines and eligibility rules may still shift before the policy becomes final.

For now, the draft points to a bigger opening for imports and NEVs, but also a harder road for local parts makers. Until the government issues the final policy, all the figures should be treated as provisional.

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