Car makers have warned that Pakistan’s used-car Gift Scheme could hurt local manufacturing, jobs and investment, saying a facility meant to help overseas Pakistanis is being misused for commercial vehicle imports.
In a letter to Advisor to the Prime Minister on Industries and Production Haroon Akhtar Khan, the Pakistan Automotive Manufacturers Association (PAMA) said imports under the scheme jumped from just 7 vehicles in May 2026 to 2,238 in September.
According to PAMA, the Gift Scheme accounted for around 98 percent of all used vehicle imports in September, while imports under the Transfer of Residence Scheme remained negligible.
Car Makers Raise Concerns Over Gift Scheme
The letter, dated October 28, shows that imports under the Gift Scheme rose to 806 vehicles in June, 1,876 in July, and 1,406 in August before reaching 2,238 in September.
PAMA said it supports facilitating overseas Pakistanis under SRO 61(I)/2026, issued on January 15, 2026. However, the association believes the sharp rise in imports suggests the scheme is being used beyond its intended purpose.
It also highlighted a shift in used-car imports from the Baggage Scheme to the Gift Scheme within a few months.
The association raised concerns about how vehicles imported under the scheme are certified and approved overseas. It called for a review of the certification and monitoring process to prevent the facility from being used for commercial trading.
The concerns follow a sharp increase in used-car imports in recent months. Earlier this month, reported data showed that used-car imports had increased by 4,600 percent. Importers have also raised concerns about the possible misuse of the Gift Scheme.
Local Manufacturing and Jobs at Stake
PAMA said Pakistan’s automotive industry has invested more than Rs. 1 trillion in local manufacturing. The sector now has more than 31 brands and over 100 models produced across 13 plants, with localization reaching around 60 percent in many categories.
The association argued that tariff reductions under the National Tariff Policy, including depreciation of up to 60 percent on used imported cars, could make imported vehicles more competitive and discourage local manufacturing.
According to PAMA, these policies risk undermining domestic investment, employment and the development of local automotive supply chains.
The association has asked the government to introduce safeguards against misuse of the scheme and requested a meeting with the adviser to present its recommendations.
PAMA has not publicly quantified the number of jobs or the amount of investment that could be affected specifically by imports under the Gift Scheme.
