PAMA seeks review of Gift Scheme to prevent its misuse
LAHORE: Pakistan Automotive Manufacturers Association (PAMA) has requested the Ministry of Commerce to undertake an immediate review of the Gift Scheme and introduce appropriate safeguards to prevent its misuse.
“We further request that the Government reassess policies that encourage excessive imports of used vehicles at the expense of domestic manufacturing and ensure that all import-related measures remain aligned with Pakistan’s industrial development objectives,” said Director General PAMA Razi ur Rehman in a letter to Haroon Akhtar Khan, Advisor to the Prime Minister, Industries & Production Division, Islamabad.
The DG PAMA drew the Ministry’s attention to the alarming surge in imports of used vehicles under the Gift Scheme and its increasingly damaging impact on Pakistan’s automotive manufacturing sector, associated vendor industry, employment and future investments.
The letter stated the imports of used vehicles under the Gift Scheme have increased at an unprecedented rate, rising from merely 7 units in May 2026 to 806 units in June, 1,876 units in July, 1,406 units in August, and 2,238 units in September 2026.
“In contrast, imports under Transfer of Residence Scheme have remained negligible during the same period. Most importantly, the Gift Scheme reportedly accounted for approximately 98percent of total used vehicle imports in September 2026, clearly demonstrating a dramatic shift in the import channel being utilized,” mentioned the letter.
The DG emphasized that PAMA fully supports genuine facilitation measures for overseas Pakistanis under SRO 61(I)/2026 dated 15 January 2026 but the extraordinary increase in import volumes strongly suggests that the Gift Scheme is being used in a manner beyond its intended purpose.
He explained that Pakistan’s automotive industry has invested over a trillion rupees to establish domestic manufacturing capabilities and achieve significant localization and today, 31 plus brands, over 100 models with 13 manufacturing plants are operating in the country with a strong local supply chain, enabling approximately 60percent localization in many vehicle categories.
“The continued growth of used vehicle imports under schemes intended for personal use threatens these investments and weakens the government’s broader objective of industrialization and import substitution.
“PAMA is also deeply concerned about the direction of recent tariff reforms under the National Tariff Policy. The sharp reduction in import duties and up to 60percent depreciation on used Completely Built-Up (CBU) vehicles, coupled with growing proposals to further liberalize imports, is eroding the competitive space available for domestic manufacturers.
“Such measures discourage local manufacturing, technology transfer, employment generation, and future investment in Pakistan’s automotive sector,” reasoned the DG.
Razi was of the view that the near-complete migration of used vehicle imports from the Baggage Scheme to the Gift Scheme within a matter of months raises serious questions regarding the processes through which these vehicles are being certified and approved overseas.
He said that the drastic shift in import patterns appears to reflect widespread and coordinated activities involving certifications issued, enabling large volumes of used vehicles to enter Pakistan under the Gift Scheme, therefore, the government may wish to undertake a comprehensive review of the certification, verification, and monitoring mechanisms currently being exercised to ensure that the scheme is being used strictly in accordance with its intended objectives and not as a conduit for commercial trading activities.
Copyright Business Recorder, 2026