Karachi, May 11 -- Pakistan's local auto industry is facing mounting uncertainty ahead of the FY26 budget, as the government considers tariff reforms under pressure from the International Monetary Fund (IMF). The IMF has urged Islamabad to reduce high duties on vehicles and allow the commercial import of used cars - a move that has alarmed domestic manufacturers and auto parts suppliers.
The IMF argues that Pakistan's auto sector is overly protected, with taxes and duties on locally produced vehicles exceeding 40%. It says this level of protection discourages competition, inflates prices, and ultimately harms consumers. In contrast, industry stakeholders warn that slashing tariffs and opening the market to used car imports could seriously ...