The New Auto Policy 2026–31 in Pakistan is the framework meant to replace the 2021–26 policy, which ended on 30 June 2026. Car buyers, assemblers and parts makers have been waiting for it ever since. This blog explains where the approval stands, what the draft proposes on duties, local manufacturing and electric vehicles, and what it could mean for your next car purchase.
Pakistan New Auto Policy 2026: Where the Approval Stands
Draft Approved, Policy Not Yet Final
Headlines in September said the prime minister had approved the policy, and many readers took that to mean it was done. In reality, he cleared only the initial draft and asked officials to revise it, with more focus on technology transfer and jobs for skilled Pakistanis. A steering committee had already given its in-principle nod in August. Soon after the September reports, a senior official in the prime minister’s office said the policy was still being finalized and no final decision had been taken. That is why the Pakistan new auto policy 2026 cannot be treated as law yet. A draft carries no legal force, and nothing binds a buyer, a bank or an assembler until the ministry issues a formal notification. Meanwhile, the old framework has been gone since June. Reports say some manufacturers have delayed deliveries and pricing decisions while they wait, and the tax concession hybrids enjoyed under the old policy lapsed with it. So the market is running without a clear rulebook, and every number you read online right now is a proposal, not a rate you can plan around.
Approval Timeline So Far
| Date / Stage |
Update |
| 30 June 2026 |
The previous auto policy expired, leaving the sector without a new policy. |
| 13 August 2026 |
A steering committee reportedly gave in-principle approval to the proposed policy. |
| 9 September 2026 |
The Prime Minister reportedly approved the initial draft and requested revisions. |
| 2 October 2026 |
IMF talks concluded without an agreement. |
| Economic Coordination Committee (ECC) |
Approval is still pending. |
| Federal Cabinet |
Final approval is still pending. |
| Ministry Notification |
The official notification has not yet been issued. |
IMF, ECC and Cabinet Still to Go
The next hurdle is the International Monetary Fund. Cutting import duties reduces government revenue, so the draft must be checked against Pakistan’s loan programmed. Talks in early October ended without agreement, with the lender objecting to some provisions, and the government plans to revise the draft after more consultation with automakers and importers. After the IMF stage, the proposal must go to the Economic Coordination Committee, then the federal cabinet, and finally the ministry must notify it. Reports also say it may go to Parliament and be enacted through a Finance Bill. Local parts makers have their own concerns. They argue that tariff cuts should come only after production costs fall, otherwise cheaper imports will hurt domestic suppliers. Because of these disagreements, no date has been announced for the new government auto policy Pakistan has been waiting for, and the process has already run months past the old policy’s expiry. Watch for one signal only, which is the ministry’s notification. Until it appears, meetings and sourced reports show direction, not a final outcome.
What the Draft Proposes for Cars, EVs and Local Industry
Key Proposals at a Glance
Here is what the Pakistan automotive industry policy draft reportedly proposes. None of it is in force:
| Policy Measure |
Details |
| Average Vehicle Import Tax |
Expected to decrease from 10.6% to 7.4% by 2030. |
| Customs Duty Slabs |
Four proposed slabs of 0%, 5%, 10%, and 15%. |
| Duty on Fully Built-Up (CBU) Imports |
Customs duty capped at 15%. |
| Customs Duty on Conventional Vehicles |
Expected to be reduced by up to 80% over five years. |
| Additional Duties on Used Vehicle Imports |
Regulatory and additional duties are expected to be gradually withdrawn by 2030. |
| Annual Vehicle Production Target |
Vehicle production is targeted to exceed 500,000 units annually. |
| EV and Hybrid Sales Target |
Electric and hybrid vehicles are expected to account for 30% of car sales by 2031. |
| Hybrid Vehicle Import Duty |
Duty is expected to decrease from 50% to 30% over five years for several engine categories. |
| Possible Environmental Levy (2,001–3,000cc) |
A proposed levy of 10%. |
| Possible Environmental Levy (3,001cc and Above) |
A proposed levy of 19.5%. |
Pakistan EV Policy 2026–2031: What Is on the Table
The EV side of the draft is where the biggest changes are reported. Electric vehicles would get a 1% sales tax on parts used in local EV production, along with exemption from federal excise duty, capital value tax and advance income tax. Charging station equipment would attract only 1% customs duty. The draft also gives battery electric, plug-in hybrid and range-extended electric vehicles equal status, which matters because range-extended models are often left out of local policy talk. Separately, the government’s new energy vehicle plan targets about 2.2 million electric vehicles by 2030. Hybrids may see a mixed result, since reports say some existing concessions could end even as import duty slabs come down. The final notification will decide which direction holds. For buyers, the safe view is simple. Lower duties may reduce one part of a car’s price, but exchange rates, production costs and assembler margins also count, so a price drop is possible but not promised.
FAQs
Has the new auto policy been approved in Pakistan?
Not fully. The PM cleared an initial draft in September, but the IMF, ECC, cabinet and the ministry’s notification are still pending.
When will the policy start?
There is no date yet. The old policy ended on 30 June 2026 and talks are still going on, so any date you see is a guess.
Will car prices fall after the new policy?
They might, but it is not guaranteed. Duty is only one part of the price. The exchange rate and local costs matter too.
What is in it for EV buyers?
The draft proposes tax relief for EVs and local EV parts, plus cheaper charging equipment. For now, these are only proposals.
Is it good for hybrid cars?
It is not clear yet. Import duty on hybrids may come down, but some local hybrid concessions could end.
Should I wait to buy a car?
If you need a car now, don’t wait on a draft. Nothing in it applies yet, and the timeline keeps slipping.