KARACHI: As the government prepares to unveil the federal budget for the next fiscal year, the upcoming National Tariff Policy 2025-30 — designed under IMF guidance — is triggering alarm among local auto assemblers.

The plan proposes gradually lowering import duties, liberalising used car imports and permitting commercial imports of used vehicles. Industry stakeholders warn these measures could destabilise the local auto sector, erode foreign exchange reserves and widen the current account deficit.

Under the proposed tariff rationalisation, duties on completely built-up (CBU) vehicles would be slashed to 15 per cent over five years, down from the current 20pc. Additional Customs Duty (ACD) and Regulatory Duty (RD) will be phased out, and the number of tariff slabs reduced from five to four. The government also plans to eliminate the fifth schedule and lower the maximum slab rate to 15pc.

This sweeping overhaul of the trade regime is apparently aimed at fostering export-led growth, but the auto sector sees it as a serious threat. While the IMF-backed policy seeks to bring Pakistan’s tariff structures in line with global norms, local manufacturers argue that it risks flooding the market with cheaper used vehicles and reversing years of progress in localisation, employment and........

© Dawn Business