Pakistan Auto Policy 2026-31: IMF Talks Set for October
The Pakistan Auto Policy 2026-31 is heading into talks with the IMF in October, with the tax and tariff measures in the draft expected to be the main point of discussion.
The framework has received in-principle approval, but that is not the same as a final notification. Until the policy is formally issued, nothing in it is in force.
We've covered the duty side of this in detail in our earlier piece on the Pakistan Auto Policy 2026-31 and car import duties.
Pakistan Auto Policy 2026-31 Latest Update
Here's where things actually stand, because the distinction matters:
| Stage | Status |
|---|---|
| Policy framework | In-principle approval granted |
| Tax & tariff measures | Under discussion |
| IMF consultations | Expected in October |
| Final notification | Pending |
| Previous policy | Expired 30 June 2026 |
That last row is the uncomfortable part. The previous Auto Industry Development and Export Policy lapsed at the end of June, so the sector has been operating without a current policy framework since then.
Why Are IMF Talks Important for the New Auto Policy?
Any tax concession or tariff reduction reduces government revenue, and revenue targets are central to Pakistan's programme commitments. That makes the fiscal side of an auto policy something the IMF takes an interest in.
This is the main reason a policy that is essentially about manufacturing and localisation ends up needing external consultation at all. The industrial objectives aren't controversial the cost of the incentives used to reach them is.
Business Recorder has reported that consultations with the IMF were continuing around the new auto policy and that the process had already faced delays.
What Could Change Under Auto Policy 2026-31?
The measures under discussion fall into four broad areas. All of these are proposals at this stage, and specifics can change before notification.
- Vehicle duties — the structure applied to imported vehicles and to imported parts used in local assembly.
- Tax concessions — relief aimed at particular vehicle categories rather than across the board.
- EV incentives — support for electric vehicles, both imported and locally assembled.
- Hybrid incentives — treatment of HEVs and PHEVs, which lost their previous concession when the last policy lapsed.
One example of how narrow these debates get is the ongoing discussion around luxury car tax in Pakistan, where proposed relief on high-end vehicles has drawn attention precisely because of its revenue implications.
Why Has Pakistan's New Auto Policy Been Delayed?
The timeline has slipped more than once. The policy was expected in July, then August, and IMF discussions are now anticipated in October — each step pushing the final notification further out.
Policy of this kind involves multiple ministries, the revenue authority, and an industry with competing interests between assemblers, parts manufacturers and importers. Agreement takes time, and the fiscal consultation adds another gate.
The parts sector has been vocal about the cost of the wait — PAAPAM's letter to the Prime Minister over the delay in Pakistan's new Auto Policy set out the industry's position directly.
What Could the Policy Mean for EV and Hybrid Buyers?
Hybrid buyers have the clearer grievance. The concession that previously applied to HEVs and PHEVs went with the old policy, and prices moved accordingly — we covered the effect on hybrid car prices in Pakistan after the tax change.
Whether the new policy restores something similar is exactly what's under discussion. It has not been decided, and buyers waiting on a confirmed hybrid concession are waiting on the notification, not on the draft.
For EVs the direction of travel has been more consistent, though again the specifics which vehicles qualify, at what rate, for how long — are not settled.
When Will Pakistan Auto Policy 2026-31 Be Finalized?
There is no announced date for the final notification. What's expected is the IMF discussion in October and that is a step in the process, not the end of it.
Given how the timeline has moved so far, treating October as a checkpoint rather than a launch is the realistic reading. The policy takes effect when it is formally notified, and not before.
What Could the New Auto Policy Mean for Car Prices?
Nobody can tell you what car prices will be under a policy that hasn't been notified. What can be said is which levers matter: duties on imported vehicles, duties on imported parts for local assembly, and category-specific concessions.
If duties on parts fall, locally assembled cars have room to get cheaper. If concessions narrow, some categories get more expensive. Which way any individual model moves depends on the final text.
Financing is the other half of affordability, and that discussion is running in parallel — see our coverage of proposed changes to EV financing in Pakistan.
Final Thoughts
The Pakistan Auto Policy 2026-31 has cleared the in-principle stage and now goes to IMF consultation in October, with taxes and tariffs the sticking point. For buyers the practical takeaway is to avoid making decisions on the basis of proposed incentives nothing in the draft applies until the policy is notified, and the timeline has already moved several times.
Note: The measures described here are proposals under discussion, not confirmed policy. In-principle approval is not a final notification, and details may change before the policy is issued.
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