The government has proposed increasing the localization of automobile parts in Pakistan, requiring automakers to raise local content from 10% to 40% over the next five years under the new auto policy.
Prime Minister’s Adviser on Industries and Production Haroon Akhtar Khan said the proposed policy focuses on localization, exports, consumer interests, vehicle quality and safety. He clarified that drafts circulating in the market are not final and said the final policy has been prepared after considering the interests of consumers, manufacturers and exporters.
The higher localization targets are expected to support domestic auto-parts manufacturers and create more employment through increased local production. Auto-parts exporters would also be eligible for Drawback of Local Taxes and Levies (DLTL) incentives under the proposed framework.
The policy will also retain pre-inspection requirements for imported vehicles, while vehicle verification will involve the Pakistan Standards and Quality Control Authority (PSQCA). Third-party inspection will be permitted, with foreign certification accepted subject to establishing a subsidiary office in Pakistan.
The government also plans to make compliance with 69 regulations under the WP-29 Convention mandatory to strengthen vehicle safety standards. Consultations with commercial vehicle importer associations have also been completed regarding proposed changes to vehicle imports.
