Karachi, May 11 (UNI) Pakistan’s local auto industry is facing mounting uncertainty ahead of the FY26 budget, as the government considers tariff reforms under pressure from the International Monetary Fund (IMF). The IMF has urged Islamabad to reduce high duties on vehicles and allow the commercial import of used cars — a move that has alarmed domestic manufacturers and auto parts suppliers.
The IMF argues that Pakistan’s auto sector is overly protected, with taxes and duties on locally produced vehicles exceeding 40%. It says this level of protection discourages competition, inflates prices, and ultimately harms consumers. In contrast, industry stakeholders warn that slashing tariffs and opening the market to used car imports could seriously damage local manufacturing and lead to widespread job losses, Dawn reported.
On 6 May, representatives from the industry met with Prime Minister’s Special Assistant on Finance, Haroon Akhtar Khan, to express their concerns. Khan assured them that the government would not jeopardise local investment and would aim for a balanced approach that includes industry consultation.