KARACHI: The Ministry of Commerce has amended the Import Policy Order 2022, imposing a ban on the import of used cars under the personal baggage scheme.
The amendment was notified through Statutory Regulatory Order (SRO) 61(I)/2006, which restricts the import of second-hand vehicles exclusively to the “gift” and “transfer of residence” schemes.
The personal baggage scheme, previously the most commonly used channel by overseas Pakistanis, has been formally abolished. Furthermore, vehicles imported through the gift and transfer of residence schemes will remain non-transferable for one year from the date of import.
In addition, cars imported under the transfer of residence scheme must originate from the same country where the overseas Pakistani has been residing.
The SRO also extends the permissible time frame for importing vehicles under these schemes to 850 days, compared to the earlier limit of 700 days, calculated from the date of filing the Goods Declaration for the last import.
Moreover, the notification further states that all minimum safety, environmental, and regulatory standards applicable to the commercial import of used vehicles will also apply to imports made under the gift and transfer of residence schemes.
These standards will be enforced as notified by the Ministry of Industries and Production or the Engineering Development Board (EDB).
In this sense, the Federal Cabinet ratified an Economic Coordination Committee (ECC) decision dated December 9, 2025, allowing overseas Pakistanis to import used vehicles up to three years old under the two remaining schemes.
However, the All Pakistan Motor Dealers Association (APMDA) has expressed serious concerns over the policy change. APMDA Chairman H.M. Shahzad warned of a sharp decline in used car imports in 2026, following the import of 40,000 vehicles in FY25 and 18,000 units during the first half of FY26.
He noted that nearly 99 per cent of used cars were previously imported under the personal baggage scheme, with small vehicles of up to 660cc accounting for 90 per cent of total imports, mainly from Japan.
Shahzad cautioned that the restrictions could result in the loss of millions of dollars in duties and taxes, citing that used car imports contributed approximately $500 million to the national exchequer in FY25.
Meanwhile, representatives of the Pakistan Association of Automotive Parts and Accessories Manufacturers welcomed the decision, stating that it would help protect the local auto and parts industry while restoring the original intent of import schemes for genuine overseas Pakistanis.
