Pakistan’s auto manufacturers and Tier-1 auto parts companies could face penalties for failing to meet mandatory export targets under the government’s proposed five-year Auto Policy, according to the official draft seen by RBN.

The draft proposes Mandatory Export Targets (METS) for original equipment manufacturers (OEMs) and Tier-1 manufacturers, with penalties for companies that fail to achieve their assigned targets.

The government also plans to introduce a Duty and Tax Remission for Exporters (DLTL) scheme. Under the proposed framework, exporters would receive a baseline compensation of 5 percent, along with an additional 10 percent compensation on incremental exports.

An Export Facilitation Council is also proposed to oversee export targets, support market development and promote international trade.

The draft policy further includes a Vendor Upgradation and Technology Transfer Programme aimed at improving the capabilities of local auto parts manufacturers and supporting the development of industrial clusters.

The proposed measures are intended to push Pakistan’s automotive sector toward higher exports and reduce its reliance on the domestic market.

The Auto Policy is still being finalized, with the government holding several committee meetings as it works through outstanding issues and delays before its final approval.