Curbs on import of 3-year-old used vehicles likely: Hundi/hawala transactions to be on radar

ISLAMABAD: The government is set to impose restrictions on the import of three-year-old used vehicles by Overseas Pakistanis in a bid to prevent misuse of the facility and curb hundi and hawala transactions reportedly being used by importers, well-informed sources told Business Recorder.

The decision was taken at an inter-ministerial meeting held on Wednesday, chaired by Minister for Commerce Jam Kamal Khan, attended by Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan, as well as, representatives of the Pakistan Automotive Manufacturers Association (PAMA) and the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM).

In a previous meeting, the Economic Coordination Committee (ECC) chaired by Finance Minister Muhammad Aurangzeb had considered a summary submitted by the Commerce Division regarding proposed amendments to the procedure for vehicle imports under the Personal Baggage, Transfer of Residence, and Gift Schemes (Appendix-E) of the Import Policy Order 2022.

Used cars for expats: ECC will consider MoC proposal to cease 2 schemes

After detailed deliberations, the ECC directed the Commerce Division to hold further consultations with stakeholders and resubmit the proposal.

According to sources, Wednesday’s meeting decided that these schemes would be tightened and restricted to genuine Overseas Pakistanis residing abroad. Imported vehicles would have to be registered in the name of the concerned expatriate at least six months prior to their departure from the country of residence.

Sources further revealed that while the Ministry of Overseas Pakistanis and the Ministry of Commerce favoured a relatively lenient approach, the Ministry of Industries strongly opposed the current flexibility, arguing that the schemes were being abused by commercial importers under the guise of Overseas Pakistanis.

“Unscrupulous traders purchase passports of expatriates for around Rs 200,000 and use their identities to pay for vehicles through hawala. These cars are then sold to individuals with undeclared, untaxed money who cannot openly purchase locally assembled vehicles,” the sources added.

The PAAPAM representative voiced concerns over the import of used cars, noting that it directly reduces demand for locally manufactured auto parts. He urged the Commerce Minister to adopt measures discouraging the inflow of used vehicles.

The Commerce Minister informed the meeting that the ECC had earlier directed the Ministry of Commerce to revise and relax certain conditions for used car imports under the three schemes. “The Ministry is now working to modify the originally proposed measures and conditions,” an official said.

PAAPAM also expressed reservations regarding the upcoming Auto Industry Policy, stressing that the last two policies were unfavourable to local parts manufacturers and overly supportive of new assemblers, many of whom maintain minimal local content. With the current incentive period ending in June 2026, the association urged that the new policy should not again discourage the vendor industry by lowering tariffs.

Once the recommendations are finalised, a revised summary will be submitted to the Economic Coordination Committee (ECC) for approval.

Copyright Business Recorder, 2025