ISLAMABAD: The government is likely to extend the tenure of the present auto policy for another year owing to the failure of the negotiations with the International Monetary Fund (IMF) and the Tariff Policy Board, it is learnt.
Reliable sources in the Ministry of Industries and Production said that negotiations with the IMF and the Tariff Policy Board on a new auto policy have not made any breakthrough, following which the government has agreed to a one-year extension of the current auto policy.
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According to sources in the Ministry of Industries and Production, further consultations with relevant institutions, including the IMF, will continue to finalise the new policy. Auto companies have also failed to achieve the set export targets and to make many local vehicles compliant with global standards. Sources in the Ministry of Industries and Production said several targets under the previous auto policy remained unmet.
Prime Minister Shehbaz Sharif had directed the Ministry of Industries to prepare an investment-friendly auto policy. The proposed policy aimed to create new employment opportunities, increase industrial activity, and make international vehicle safety standards compulsory for locally manufactured vehicles.
Under the proposed policy, the companies that fail to meet global safety requirements would face penalties. It also proposed the implementation of 62 international safety standards for both imported and locally manufactured vehicles. Consultations on the new auto policy are continuing with the Federal Board of Revenue (FBR), the Ministry of Commerce, the Ministry of Law and Justice, and the Ministry of Science and Technology.
Copyright Business Recorder, 2026