Prime Minister Shehbaz Sharif has given in-principle approval to Pakistan’s new Auto Policy 2026–31, marking a major development for the country’s automobile industry.
According to sources, the policy will next be shared with the International Monetary Fund (IMF) for approval. Once cleared by the lender, it will be presented to the Economic Coordination Committee (ECC) before being sent to the federal cabinet for final approval.
Following cabinet approval, the policy will be presented in Parliament and subsequently enacted into law through a Finance Bill.
The approval comes after months of delays in finalizing the new automotive framework. The policy had faced difficulties following the FY27 budget discussions due to disagreements between the government and local automobile manufacturers over proposed measures concerning electric vehicles (EVs), hybrid vehicles, taxation, and localization.
The new Auto Policy 2026–31 aims to encourage the adoption of electric and hybrid vehicles while strengthening Pakistan’s domestic automobile manufacturing sector.
The policy is also expected to promote technology transfer, increase localization of vehicle production and reduce the country’s dependence on imported petroleum products.
The government’s push toward EVs and hybrid vehicles is part of broader efforts to modernize Pakistan’s automotive sector and reduce fuel import requirements.
If approved through all stages, the policy will provide a new regulatory framework for the automobile industry for the 2026–31 period.
