ISLAMABAD: The Ministry of Commerce has postponed a meeting of the Tariff Policy Board (TPB), originally scheduled for Saturday, which was to address concerns of the auto industry and the Ministry of Industries and Production (MoI&P), as automobile units reportedly face closures due to delays in decision-making, well-informed sources told Business Recorder.
“The 14th meeting of the Tariff Policy Board (TPB) has been postponed. The revised date and time will be communicated in due course,” the Commerce Ministry said in an official communication.
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Sources revealed that on Friday (July 3, 2026), Secretary Commerce Jawad Paul briefly left a meeting of the National Assembly Standing Committee on Commerce for about 20 minutes after receiving a phone call related to tariff rationalisation. Upon his return, when committee members asked about his absence, he stated that discussions were underway regarding issues related to the auto policy.
The Ministry of Industries and Production, in a letter to the Secretary Commerce, pointed out that the Automotive Industry Development and Export Policy (AIDEP) 2021–26 has expired, while the proposed Auto and Auto Parts Manufacturing Policy 2026–30 is still under consideration and yet to be approved. Ministry of industries held more than 40 consultative sessions with auto industry.
In the absence of a notified policy framework, the local automotive industry is facing significant uncertainty regarding the applicable customs duty structure for Completely Knocked Down (CKD) kits and auto parts. The continuation of the existing tariff regime without any interim arrangement is likely to negatively impact production planning, investment decisions, supply chain management, localisation efforts, and overall sector stability.
This uncertainty has intensified following the rationalisation of customs duties on Completely Built Units (CBUs) under the National Tariff Policy 2025–30, incorporated into Schedule-I of the Pakistan Customs Tariff after the approval of the Finance Act 2026–27. The development has underscored the need for a clear and timely interim framework for CKD kits and auto parts.
MoI&P, in its letter dated July 2, 2026, urged that since tariff-related matters fall within the mandate of the TPB, an emergent meeting of the Board be convened to deliberate and recommend an appropriate interim mechanism for determining customs duty on CKD kits and auto parts until the new policy is finalised.
Meanwhile, the Pakistan Automotive Manufacturers Association (PAMA), in a letter to the Prime Minister, has warned that following parliamentary approval of the Finance Act 2026, the industry is facing an unprecedented crisis. The revised tariff structure has placed duty rates on imported CBUs and commercially imported parts below those applicable to industrial CKD kit imports.
Furthermore, the reduction in CBU duty on vehicles below 850cc has significantly undermined the viability of local manufacturing in this segment. According to PAMA, the anomaly threatens to reverse decades of progress by making domestic production commercially unviable, disrupting the vendor base, discouraging investment, and putting millions of livelihoods at risk.
Given the gravity of the situation, PAMA has sought the Prime Minister’s immediate intervention to resolve differences among the commerce, revenue, and industry wings of the government. It stressed that early correction of tariff anomalies is essential to restore industrial activity, maintain investor confidence, and safeguard Pakistan’s manufacturing base.
The association warned that the automotive sector is currently in a state of distress and urgently requires government support to prevent irreversible damage to an industry that has played a key role in investment, technology transfer, localisation, employment, and overall economic development.
Copyright Business Recorder, 2026
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