PAMA seeks review of Gift Scheme amid surge in used vehicle imports

Pakistan Automotive Manufacturers Association (PAMA) has urged the government to review the Gift Scheme for used vehicle imports, warning that its alleged misuse threatens domestic manufacturing, employment and future investment.

In a letter to Prime Minister’s Adviser on Industries and Production Haroon Akhtar Khan, PAMA Director General Razi ur Rehman called for immediate safeguards against misuse of the scheme and a reassessment of policies encouraging excessive imports of used vehicles at the expense of local manufacturing.

According to the letter, used vehicle imports under the Gift Scheme surged from seven units in May 2026 to 806 in June, 1,876 in July, 1,406 in August and 2,238 in September.

The scheme reportedly accounted for around 98% of total used vehicle imports in September, while imports under the Transfer of Residence Scheme remained negligible during the same period.

PAMA said the sharp shift in import patterns raised concerns about whether the Gift Scheme was being used beyond its intended purpose of facilitating overseas Pakistanis.

The association said it supported genuine facilitation measures for overseas Pakistanis under SRO 61(I)/2026, dated January 15, 2026, but called for a comprehensive review of the certification, verification and monitoring mechanisms governing used vehicle imports.

Rehman said Pakistan’s automotive industry had invested more than Rs1 trillion in developing domestic manufacturing capabilities and achieving localisation. The sector now comprises more than 31 brands, over 100 models and 13 manufacturing plants, supported by a local supply chain that enables localisation of around 60% in many vehicle categories.

He warned that the continued expansion of used vehicle imports under schemes intended for personal use threatened these investments and undermined the government’s broader objectives of industrialisation and import substitution.

PAMA also expressed concern over recent tariff reforms under the National Tariff Policy, arguing that reductions in import duties and depreciation of up to 60% on used completely built-up (CBU) vehicles were eroding the competitive space available to domestic manufacturers.

“These measures discourage local manufacturing, technology transfer, employment generation, and future investment in Pakistan’s automotive sector,” the letter said.

Rehman said the near-complete shift in used vehicle imports from the Baggage Scheme to the Gift Scheme within a few months raised serious questions about the procedures used to certify and approve vehicles overseas.

He added that the change in import patterns appeared to indicate widespread and coordinated activities involving certifications that enabled large volumes of used vehicles to enter Pakistan under the Gift Scheme.

PAMA urged the government to examine the existing mechanisms to ensure that the scheme was used strictly for its intended purpose and did not become a channel for commercial vehicle trading.