Govt plans stricter rules on used car imports by overseas Pakistanis

PAAPAM indicates that increased imports of used vehicles are damaging locally based automotive parts manufacturers
An undated image of cars parked. — AFP
An undated image of cars parked. — AFP

The government is preparing to impose stricter controls on the import of three-year-old used vehicles by Overseas Pakistanis, aiming to curb misuse of the facility and tackle illegal hundi and hawala transactions linked to car imports.

The issue was discussed at an inter-ministerial meeting chaired by Commerce Minister Jam Kamal Khan, attended by senior officials and representatives from the Pakistan Automotive Manufacturers Association (PAMA) and the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM).

Earlier, the Economic Coordination Committee (ECC) directed the Commerce Division to revise the import facilitation processes for the Personal Baggage, Transfer of Residence, and Gift Schemes provisions provided under Import Policy Order 2022.

According to Business Recorder, the meeting concluded that it would be best to put limitations in place in order to prevent misuse of the schemes and ensure genuine Overseas Pakistanis would directly benefit from the provisions.

For vehicles imported under these schemes, it was proposed that all the vehicles must be registered to the expatriate for at least six months before departing their country of residence.

While the ministries of overseas Pakistanis and commerce were supportive of the changes, the Ministry of Industries & Production (MoI&P) recommended stricter controls.

Government officials noted that some traders buy expatriate passports for around Rs200,000 to import cars using informal payment channels and later sell them to buyers with undeclared funds.

Notably, the PAAPAM indicated that increased imports of used vehicles are damaging locally based automotive parts manufacturers, and they urged the government to take steps to discourage this practice and ensure they have a balanced Auto Industry Policy (AIP). 

The Ministry of Commerce is in the process of finalising recommendations for a revision, which they expect to take to the ECC for approval.