PM Shehbaz Approves New Auto Policy Draft, Awaits IMF Approval

Prime Minister Shehbaz Sharif has approved a draft for a new five-year automobile policy. This policy aims to promote hybrid vehicles by gradually reducing import duties.

IMF Approval Required

The proposed Auto Policy 2026-31 will first be submitted to the International Monetary Fund (IMF) for approval. After IMF approval, it will be presented to the federal cabinet for final approval, as per the policy document.

Policy Duration

The new policy is set to take effect from 2026 and will remain in force until 2031.

Phased Duty Cuts for Hybrid Vehicles

The draft suggests reducing duties on imported hybrid vehicles with different engine capacities over the five-year period.

• For hybrid vehicles with engine capacities above 1,801cc, the duty could decrease from 50% to 30% in phases.

• For vehicles ranging from 1,501cc to 1,800cc, duties may also drop from 50% to 30% over the policy period.

• Vehicles between 851cc and 1,000cc could see duties reduced from 50% to 30%.

• For vehicles with engine capacities up to 800cc, the duty might also fall from 50% to 30%.

Duty Relief for Hybrid Commercial Vehicles

The draft policy includes duty reductions for hybrid commercial vehicles as well.

• The import duty on hybrid trucks is proposed to be cut from 30% to 15%.

• For hybrid light commercial vehicles, the duty could be reduced from 60% to 30%.

• The duty on hybrid buses might decrease from 30% to 15%.

Approval Process

The proposed changes are part of a broader plan to introduce a new five-year framework for Pakistan’s automobile sector. According to the proposal, the draft will undergo the IMF approval process before being presented to the federal cabinet. The government aims to implement the new policy from 2026 to 2031, pending approval completion.