Trade barriers will be eliminated in the upcoming budget, and duty on vehicles will also be zero

The federal government has decided to gradually remove old trade barriers in the budget for the next fiscal year 2026-27. In the new budget, 60 to 70 unnecessary restrictions will be removed, while more than 2,600 barriers on imports and exports will be reduced in phases.

On the recommendation of the IMF, it is proposed to reduce the average tariff from 10.7 to 9.5 percent in the next budget and the target is to reduce it further to 7.4 percent by 2030. The regulatory duty on vehicles, which is currently 40 percent, is planned to be completely eliminated in 4 years. In addition, barriers will also be removed in other sectors including textiles, pharmaceuticals, leather and chemicals.

It has been decided to make further amendments to the Export and Import Policy Orders by November 2026 and all these duty reductions will be made under the National Tariff Policy 2025-30. The Ministry of Finance says that these reforms will reduce import costs and are expected to increase exports as well as investment in the country. The final approval of all these measures will be given by the Cabinet Committee on Regulatory Reforms.