Increase in imports of used vehicles under the gift scheme

Pakistan’s automobile industry has expressed concern over the sharp rise in the import of used vehicles under the "gift scheme" and has urged the government to immediately review the existing policy. According to the Pakistan Automotive Manufacturers Association (PAMA), effective safeguards are necessary to prevent the potential misuse of this scheme, as the surge in imports could negatively impact local vehicle manufacturing and investment.

Significant Increase in Vehicle Imports Under the Gift Scheme

Razi-ur-Rehman, Director General of PAMA, has written to Haroon Akhtar Khan, the Prime Minister’s Advisor on Industries and Production, requesting a review of policies that facilitate the import of used vehicles. He stated that decisions regarding imports should align with the country’s goals for industrial development and the expansion of local production.

According to data cited in the letter, only 7 used vehicles were imported under the gift scheme in May 2016; however, this figure rose rapidly over the following months, reaching 2,238 by September.

Monthly Imports of Used Vehicles Under the Gift Scheme:

According to a letter from PAMA, the 'Gift Scheme' accounted for approximately 98 percent of total used vehicle imports in September 2026, while imports under the 'Transfer of Residence' scheme remained negligible during the same period.

Concerns Regarding Potential Misuse of the Scheme

Razi-ur-Rehman clarified that while PAMA supports measures intended to provide genuine convenience to overseas Pakistanis, import data suggests a risk that the Gift Scheme is being utilized for purposes beyond its original intent.

He emphasized that schemes designed for personal use should not be exploited for the commercial buying and selling of used vehicles. He called for a comprehensive review of the existing systems for certification, verification, and oversight in this regard.

Risk to Investments in the Local Auto Industry

In the letter, the PAMA Director General noted that Pakistan’s automotive industry has invested over Rs 1 trillion to expand local manufacturing capacity and develop the domestic production of vehicle parts.

He stated that currently, more than 31 brands and over 100 models are being produced across 13 manufacturing plants in the country, with the localization rate for parts reaching approximately 60 percent in various vehicle segments.

The letter warns that the persistent rise in the import of used vehicles could undermine local investments and hinder the government’s objectives—specifically those aimed at increasing domestic production and fostering import substitution. 

Objections Regarding Tariff Reforms and Import Duties

Razi-ur-Rehman also expressed reservations concerning recent reforms introduced under the National Tariff Policy. He stated that significant reductions in import duties, the allowance of up to 60% depreciation on fully assembled used vehicles, and proposals to further liberalize imports could exacerbate competitive challenges for the local industry.

According to PAMA, such policies risk discouraging local manufacturing, technology transfer, employment opportunities, and future investments.

Call for Improved Government Oversight

PAMA also questioned why, within a span of just a few months, the import of used vehicles shifted almost entirely from the 'Baggage Scheme' to the 'Gift Scheme.' The association argues that, given this shift, it is essential to review the procedures for the certification and approval of vehicles sourced from abroad.

Razi-ur-Rehman urged the government to strengthen the relevant oversight mechanisms to ensure that the 'Gift Scheme' is utilized strictly for its intended purpose, and to discourage its exploitation as an alternative channel for commercial imports.