The federal government has yet to finalize the Auto Industry Development and Export Policy 2026-31 after a ministerial committee failed to reach a consensus on proposed tariff rates for imported vehicles despite multiple meetings this week.
The committee, headed by Power Minister Sardar Awais Leghari, reviewed revised tariff proposals submitted by the Ministry of Industries and Production. According to officials, the ministry reduced some of its proposed tariff rates but continued to seek significantly higher protection for local manufacturers than the levels outlined in the National Tariff Policy.
Under the revised proposal, the ministry has recommended a 60 percent customs duty on vehicles with engine capacities of 1,500cc to 1,800cc by 2030, compared with 15 percent under the National Tariff Policy. The proposed rate is about 34 percent lower than existing tariffs but remains 300 percent higher than the tariff level envisaged under the national policy.
For vehicles with engine capacities of 1,001cc to 1,500cc, the ministry has proposed a 45 percent customs duty by 2030, while vehicles above 1,801cc would face a 75 percent tariff. The ministry argued that higher duties are needed to protect domestic manufacturers and encourage investment until issues such as taxation, energy costs, exchange rates, and financing costs are addressed.
The proposal also included reducing customs duties on imported parts and kits under SRO 655 to support local parts manufacturing and import substitution.
In addition, the ministry has proposed federal excise duties of up to 60 percent on larger internal combustion engine vehicles and 9.5 percent on vehicles in the 800cc to 1,000cc category.
Differences also remain over export obligations and penalties for automakers that fail to meet export targets. The Ministry of Commerce has reportedly proposed a one year transition period before implementing the lower tariff regime.
Leghari said the committee aims to finalize the policy as soon as possible but noted that additional analysis is required before a final decision can be made.
The post Govt, Industry Remain Divided With New EV Policy Delayed appeared first on ProPakistani.
