Karachi, May 19, 2025 – In a major policy shift aligned with International Monetary Fund (IMF) reforms, Pakistan is set to fully lift the ban on the commercial import of used vehicles.
This move aims to liberalize trade, reduce consumer prices, and align the country’s automotive policies with global norms. The government plans to present the necessary legislation before Parliament by the end of July 2025 to meet a structural benchmark under its agreement with the IMF.
According to the IMF’s latest report on Pakistan, authorities have committed to “submit to Parliament all required legislation for lifting all quantitative restrictions on the commercial importation of used motor vehicles.” This reform is intended to enhance market competition, ease supply constraints, and improve vehicle affordability for consumers.
Initially, the policy will allow vehicles less than five years old to be imported commercially, provided they meet minimum environmental and safety standards. Currently, Pakistan restricts the import of used vehicles to those not older than three years. The expanded age limit is expected to widen the availability of affordable, high-quality used vehicles in the domestic market.
The removal of the ban is part of a broader strategy to address Pakistan’s long-standing anti-export bias, which has been reinforced by restrictive trade policies and an inefficient tariff structure. The IMF has stressed that streamlining tariffs and eliminating non-tariff barriers—especially in the automotive sector—is essential for improving Pakistan’s economic competitiveness and attracting foreign and domestic investment.
This upcoming legislation will complement the government’s broader National Tariff Policy (FY25–30), which aims to reduce regulatory duties and eliminate preferential treatment for certain industries. The upcoming Automobile Policy (FY26–31), currently under stakeholder consultation, is also expected to reflect these liberalization goals.
The IMF has further urged Pakistan to phase out ineffective incentives for industrial zones, including Special Economic Zones (SEZs), Export Processing Zones (EPZs), and Special Technology Zones (STZs), where contractually permissible. A comprehensive implementation plan is to be submitted by December 2025.
The complete lifting of the ban on commercial import of used vehicles marks a pivotal shift in Pakistan’s trade and industrial policy. It signals a commitment to consumer choice, environmental standards, and a more open market economy.