LAHORE: The Ministry of Commerce has issued dual directives introducing structural clarifications and a selective, conditional waiver for used vehicles imported under the Gift and Transfer of Residence schemes.

While the decisions aim to resolve intense clearance logjams at ports, they have drawn sharp criticism from the local automotive industry, which warns of severe fiscal and safety ramifications.

In an official office memorandum, the ministry addressed a long-standing impasse regarding the validity of Pre-Shipment Inspection (PSI) certificates. The federal government announced that certificates issued by EAA Company (Pvt) Ltd and Auto Terminal Pak (Pvt) Ltd through their foreign principals in Japan are fully acceptable. This compliance clearance follows their formal registration with the Pakistan Standards and Quality Control Authority (PSQCA) for automobiles.

To prevent fraudulent filings, the Federal Board of Revenue (FBR) and customs authorities must verify the certificates directly with the local offices of these inspection firms, which will carry full legal liability for the declarations. The local entities must also certify that the vehicles strictly comply with environmental, safety, and quality regulations that align with global standards.

Local assemblers fear Rs22bn losses, safety risks

Concurrently, the ministry issued a statutory notification under the Imports and Exports (Control) Act, granting a strict, one-time waiver for vehicles shipped under a Master Bill of Lading between Jan 16 and March 9, 2026. This window bypasses the initial pre-shipment inspection requirement mandated under SRO 61(I)/2026.

However, the government clarified that this is not a blanket amnesty.

To prevent the dumping of hazardous or structurally compromised vehicles, Customs officials are strictly prohibited from clearing any cars graded on Japanese auction sheets as Below Average (Grade 3), Poor Condition (Grade 2), Repaired Accident (Grade R), or Minor Accident Repair (Grade RA).

Despite these regulatory safeguards, the local automotive sector has reacted with strong opposition, labelling the adjustment an ad hoc policy shift that directly undermines the country’s manufacturing base.

Industry sources report that an estimated 15,000 vehicles — roughly matching the entire annual sales volume of a major local manufacturer — are expected to arrive under this specific exemption window. Representatives contend that the sudden waiver bypasses the global safety and environmental standards established to protect Pakistani consumers on the road.

Auto sector experts express deep concern over the economic fallout of the policy relaxation, estimating that the influx will drain $180 million from the national exchequer via unofficial flight channels, worsening the national import bill.

The local vendor industry expects a substantial blow, with anticipated losses reaching Rs22 billion for automotive part manufacturers and a subsequent Rs8bn deficit in government tax revenue.

With local assembly plants already operating at a heavily restricted 50 percent capacity due to economic pressures, industry analysts warn that such unpredictable policy reversals risk permanently fracturing foreign investor confidence.

Published in Dawn, June 26 , 2026