Key Takeaways
- The government proposes a new auto policy requiring local content in car parts to rise from 10% to 40%.
- The policy aims to support local manufacturers and create more jobs.
- Auto parts manufacturers will be eligible for export incentives.
The government of Pakistan has proposed a new auto policy aimed at increasing local content in car parts to 40% over the next five years, up from the current 10%.
According to the Prime Minister’s Adviser on Industries and Production, Haroon Akhtar Khan, the policy focuses on localization, exports, consumer interests, vehicle quality and safety.
Khan stated that the draft policy is not final and contains speculative elements, but it has been designed after considering the interests of consumers, manufacturers, and exporters.
The policy aims to support local auto-parts manufacturers and create more employment through increased domestic production, while also including them in the export policy.
Auto parts manufacturers exporting their products will be eligible for Drawback of Local Taxes and Levies (DLTL) incentives, as per the adviser.
The requirement for pre-inspection certificates for imported vehicles will remain in place, and stakeholders have agreed to vehicle verification through the Pakistan Standards and Quality Control Authority (PSQCA).
Third-party inspection will also be allowed to verify vehicle quality, and certification from an authentic body in the exporting country will be accepted.
To prevent fake documentation, the certifying company will have to establish a subsidiary office in Pakistan, and PSQCA will register third-party inspection companies according to prescribed standards.
The policy also mandates compliance with 69 regulations under the WP-29 Convention to strengthen vehicle safety standards.
Consultations have been completed with associations representing commercial vehicle importers on proposed changes to vehicle imports.
