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Restrictions on import of used cars relaxed

Restrictions on import of used cars relaxed

Restrictions on import of used cars relaxed

ISLAMABAD: The Ministry of Commerce made revisions to the Import Policy 2022 on Thursday, easing restrictions on the import of used and unregistered vehicles.

According to the updated policy, the government now permits the importation of used cars with a mileage of up to 2,000 kilometers, contrasting with the previous regulation which restricted imports to vehicles with a maximum mileage of 500 kilometers.

Under the revised import policy, vehicles with mileage not exceeding 2,000 kilometers will be classified as β€œnew,” as outlined in the ministry’s notification.

It’s noteworthy that imports significantly impact the country’s economy, primarily because payments are predominantly made in foreign currency, affecting foreign exchange reserves.

Previous administrations, including caretaker setups and the Pakistan Muslim League-Nawaz (PML-N)-led Pakistan Democratic Movement (PDM) coalition government, had imposed stringent restrictions on car imports to safeguard dwindling foreign exchange reserves.

In February of this year, the State Bank of Pakistan (SBP) relaxed regulations concerning advance payments for imports, permitting authorized dealers to make full advance payments without prior approval.

Earlier reports from The News, citing data from the Pakistan Automotive Manufacturers Association (PAMA), indicated a 30% increase in car sales in January compared to the same period in 2023. PAMA reported the sale of 7,802 passenger cars in January this year, up from 6,021 units sold the previous year.

However, car sales remained down by 49% in the first seven months of the fiscal year, with 38,464 units sold compared to 74,933 during the same period in FY23.

In a statement to Geo.tv, PAMA spokesperson Abdul Waheed Khan explained that the amendment aims to accommodate brand-new cars that previously exceeded the allowable import threshold solely due to transportation and logistical reasons, despite having minimum kilometers on them.

The government’s adjustment to the import policy is not anticipated to bring about significant changes in the local automobile industry.