Cabinet may approve new auto policy within next two weeks: Haroon

ISLAMABAD: Advisor to the Prime Minister on Industries and Production Haroon Akhtar Khan has said that the federal cabinet is expected to approve new auto policy within next two weeks.

He said this here on Wednesday while briefing the Senate Standing Committee on Industries and Production, which met under the Chairmanship of Senator Saleem Mandviwalla. The Committee discussed matters related to the proposed new auto policy, the reasons for its delayed finalization, and its implications for consumers, local manufacturing, investment and employment.

Members expressed concern over the delay in finalizing the policy and sought clarification on its proposed measures and expected timeline.

Haroon Akhtar Khan said that the government sought to balance the interests of consumers and the industry, promote local manufacturing and investment, and create employment opportunities.

Khan stated that automobile companies had not fulfilled their export targets. He said that the government intended to restrict imports of completely built-up (CBU) vehicles through tariff measures and encourage greater local production of components used in completely knocked-down (CKD) assembly.

The Committee was also briefed on proposals to promote electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs). Haroon Akhtar Khan briefing the committee members on the subject said that reductions in duties and other costs were being considered to make these vehicles more affordable. He further explained that the proposed new auto policy envisaged allowing imports of electric vehicles on a one-time basis to facilitate the availability of low-cost electric vehicles in the market.

Chairman of the Committee sought clarification on the distinction between vehicle imports under the gift scheme and commercial imports. Responding to the queries, Haroon Akhtar Khan explained that the gift scheme is a one-time facility under which a vehicle could be gifted only to a blood relative, without additional duty being charged. Commercial imports, however, would be subject to applicable duties and taxes, with no restriction on the number of vehicles imported. He added that the Pakistan Standards and Quality Control Authority (PSQCA) would be responsible for setting vehicle standards and issuing the relevant certificates.

Aamir Allawala, representing the Pakistan Association of Automotive Parts and Accessories Manufacturers, informed the Committee that approximately 50 to 60 per cent of the parts used in vehicles assembled in Pakistan were manufactured locally. He stated that implementation of the proposed tariff would facilitate the import of CBUs and it would have negative impact on the local assembling and auto part industry.

Chairman of the committee emphasized the need to safeguard investment and employment in the automobile sector. Referring to concerns conveyed to the committee that approximately 2.2 million jobs could be at risk without adequate protection for the industry, he urged the government to expedite the policy so that factories could continue operating and employment could be preserved.

Senators Khalida Ateeb and Syed Masroor Ahsan also supported the protection of the local automobile industry, highlighting the large number of people employed in the sector and the importance of safeguarding their livelihoods.

At the conclusion of the meeting, the Chairman expressed the hope that the proposed new auto policy would receive Cabinet approval within the Indicated two-week period and adequately address the concerns of consumers and local manufacturers.

The meeting was attended by Senators Syed Masroor Ahsan, Khalida Ateeb and Husna Bano. Adviser to the Prime Minister for Industries and Production, Mr. Haroon Akhtar Khan, and Coordinator to the Prime Minister for Industries and Production Division, Rana Ihsan Afzal, also attended. Officials from the Ministry of Industries and Production, Ministry of Energy (Power Division), Ministry of Commerce and Engineering Development Board (EDB), along with automobile industry stakeholders, including assemblers and auto parts manufacturers, participated in the meeting.

Copyright Business Recorder, 2026