PM approves final draft of auto policy
- Domestic automobile industry enjoyed high tariff protection for decades but failed to introduce technological innovations, modern features, consumer facilities, says Tarar
Pakistan has launched a new auto policy to boost competition, encourage EV manufacturing, and reduce fuel import dependency. It aims to deliver affordable, quality vehicles after decades of protectionism failed consumers.
- Incentives for electric vehicle manufacturing and charging infrastructure.
- Reducing Pakistan's dependence on imported petroleum products.
- Increasing competition and affordability in the auto sector.
- Addressing failures of previous protectionist auto policies.
- New policy for non-custom-paid vehicles in Khyber Pakhtunkhwa.
ISLAMABAD: The federal government has introduced a new automobile policy aimed at increasing competition, encouraging electric vehicle (EV) manufacturing and reducing Pakistan’s dependence on imported petroleum products, following decades of protectionist measures that failed to deliver affordable and technologically advanced vehicles to consumers.
Federal Minister for Information and Broadcasting Attaullah Tarar, was addressing a press conference alongside Prime Minister’s Adviser on Industries Haroon Akhtar on Saturday and said that the Prime Minister had approved the final draft of the auto policy, which would now be submitted to the Federal Cabinet for consideration.
Tarar said the domestic automobile industry had enjoyed high tariff protection for decades but failed to introduce the technological innovations, modern features and consumer facilities available in international markets.
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He said the new policy would encourage additional manufacturers to enter the Pakistani market, promote local production and exports, and provide consumers with affordable, quality and environmentally friendly transport.
The minister said successive governments had maintained high import duties to protect domestic automobile manufacturers, expecting the industry to improve vehicle quality and introduce modern technologies. However, despite years of incentives and protection, consumers had not received the anticipated benefits.
He said new policy was formulated after extensive consultations with stakeholders, analysis of technical data and comparative assessments of automobile policies implemented in other countries.
The minister said Prime Minister Shehbaz Sharif had repeatedly emphasised the need to increase competition in the automobile sector and make vehicles affordable for middle-income households.
He maintained that the policy would preserve existing facilities for petrol-powered vehicles with engine capacities of up to 800cc, ensuring that consumers relying on smaller vehicles were not adversely affected.
Highlighting incentives for electric mobility, Tarar said the government had exempted the establishment of EV charging stations from customs duties and reduced the applicable sales tax to encourage investment in charging infrastructure.
He said Pakistan offered significant opportunities for electric vehicle manufacturers to establish production facilities, develop local supply chains and eventually export vehicles to international markets.
The minister stressed that domestic automobile manufacturing could not deliver its full economic potential without generating employment, expanding production and developing export-oriented capabilities.
He said the growing adoption of electric motorcycles and scooters, particularly among women and students, demonstrated increasing demand for affordable alternatives to conventional petrol-powered transport.
Referring to the economic implications, Tarar said Pakistan’s substantial petroleum import bill placed pressure on the economy, while fluctuations in international oil prices contributed to inflation and increased transportation costs for households.
He argued that wider adoption of electric vehicles could help reduce petroleum consumption and the import bill, potentially freeing financial resources for infrastructure development, healthcare, education and other public services.
Drawing a comparison with the rapid expansion of solar energy in Pakistan, he expressed confidence that electric mobility could bring similar changes to the transport sector.
Responding to a question about non-custom-paid vehicles in Khyber Pakhtunkhwa, Tarar said a formal policy was being developed to ensure the registration of such vehicles through the relevant Customs and Excise departments.
He said unregistered vehicles had previously been used in terrorist incidents, making their documentation and regulation important for security and administrative oversight.
The minister maintained that the new automobile policy would strengthen competition, encourage investment, reduce dependence on imported fuel and improve access to affordable transport.
Copyright Business Recorder, 2026