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 ministry on Wednesday issued an SRO 61(I)/2006, which said that used cars would be imported only under the “transfer of residence and gift schemes.”
Vehicles imported under the gift and transfer of residence schemes shall remain non-transferable for a period of one year from the date of importation, the SRO said.
Vehicles imported under the transfer of residence scheme shall be from the same country in which the overseas Pakistani resides. The time frame for importing the vehicles has also been extended to 850 days from the previous 700 days from the date on which the Goods Declaration for the last import under this order was filed.
Commerce ministry restricts import of second-hand vehicles to ‘gift’ and ‘transfer-of-residence’ schemes
The SRO further stated that minimum safety and environmental standards and regulatory measures, as applicable to the commercial importation of used vehicles, duly notified by the Ministry of Industries and Production or the Engineering Development Board (EDB), shall apply mutatis mutandis to vehicles imported under the gift and transfer of residence schemes.
Earlier in January, the Federal Cabinet ratified the Economic Coordination Committee (ECC) decision of December 9, 2025, allowing overseas Pakistanis to import used vehicles up to three years old under two schemes.
All Pakistan Motor Dealers Association (APMDA) Chairman H.M. Shahzad painted a gloomy picture of the arrival of used cars in 2026, following an influx of 40,000 used cars in FY25 and 18,000 units in 6MFY26 (first six months of FY26).
He said on Dec 9, 2025, the personal baggage scheme, which had long facilitated overseas Pakistanis, had been abolished, while the gift and transfer of residence schemes were further tightened with additional restrictions. The decision has created anxiety among overseas Pakistanis and stakeholders in the motor import business.
The government, he said, would lose millions of dollars in duties and taxes, as the import of 40,000 vehicles had contributed $500 million to the exchequer in FY25. The commercial import of vehicles has also been subjected to highly unreasonable terms, he added.
Mr Shahzad said that out of the total imports of used cars, the share of small cars (660cc) was 90 per cent, while 99pc of small cars were finding their way into Pakistan from Japan.
He said that previously, out of the total imports of used cars, 99 per cent arrived under the “personal baggage scheme.”
Regarding commercial imports of used cars, he said standard operating procedures are being formulated, but the government has already imposed a 40 per cent regulatory duty on used cars (under five years old) until June 30, 2026, on top of existing duties. He said the regulatory duty would be reduced by 10 per cent annually from FY27, reaching zero by FY30.
On Jan 12, Pakistan Association of Automotive Parts and Accessories Manufacturers Chairman Usman Aslam Malik and Senior Vice Chairman Shehyar Qadir said that the government’s decision to regularise used car import schemes is a major step towards restoring their original intent for genuine overseas Pakistanis while safeguarding the country’s local automotive and auto parts industry.
Published in Dawn, January 16th, 2026
