Import of used vehicles: PSI mechanism delayed amid inter-ministerial differences

ISLAMABAD: The federal government’s stringent policy on the import of used vehicles both on a commercial basis and under schemes for Overseas Pakistanis—has reportedly brought imports to a standstill, as the Pre-Shipment Inspection (PSI) mechanism has yet to be implemented due to differences between the Ministry of Commerce and the Ministry of Industries and Production, well-informed sources told Business Recorder.

The Ministry of Industries and Production (MoI&P), through the Engineering Development Board (EDB), had proposed amendments to the Import Policy Order (IPO) 2022 to introduce a mechanism for the registration of Pre-Shipment Inspectors. However, the Ministry of Commerce raised objections to the proposed framework.

A consultative meeting, chaired by Special Secretary, Ministry of Commerce, Syed Hamid Ali, reviewed the proposed amendments concerning the incorporation of a PSI mechanism for vehicle imports. Participants agreed to adopt a cautious yet facilitative approach.

READ MORE: Overseas Pakistanis allowed to import used vehicles

The chair informed the meeting that the Economic Coordination Committee (ECC), while approving the commercial import of used vehicles, had directed the MoI&P to notify safety standards. In compliance, the EDB issued safety and environmental standards through a notification of September 30, 2025.

These standards have already been made mandatory for vehicle imports under various schemes, including Transfer of Residence and Gift schemes listed in Appendix-E of the IPO 2022.

During the meeting, the EDB proposed aligning the PSI regime under the IPO 2022 with the newly notified standards to ensure compliance at the import stage. The proposal included making it mandatory for all used vehicles—whether imported commercially or under specific schemes—to carry a pre-shipment inspection certificate issued by internationally accredited PSI companies.

The EDB further suggested that PSI companies should be registered both in the country of origin and with the EDB, and preferably be located in the same country as the vehicle’s original equipment manufacturer (OEM) to ensure authenticity.

However, the chair observed that the ECC had only approved the notification of standards and had not endorsed any specific PSI mechanism or list of companies. It was also noted that the revised PSI regime approved in December 2025 had already removed the list of approved PSI companies, aligning the framework with international accreditation standards and promoting competition.

Representatives from the Federal Board of Revenue (FBR) questioned the need for introducing a separate mechanism for vehicle imports, given the existence of a more flexible and updated PSI regime. In response, EDB officials argued that the proposal aimed to curb misuse by ensuring inspections are conducted in the country of origin rather than in third countries.

The meeting noted that the proposed amendments were not fully aligned with the existing EDB notification and might require prior revision of the notified standards.

Copyright Business Recorder, 2026