Pakistan's New Auto Policy Delayed After IMF Talks Stall

Pakistan's long-awaited new auto policy — meant to replace the outgoing framework and run from 2026 to 2031 — was expected to launch on July 1, 2026. It didn't. According to Business Recorder and ProPakistani, the government and the IMF failed to reach consensus in time, and the previous policy — which technically expired on June 30 — is now being extended for another year instead.

What Was the New Policy Supposed to Do

The new Auto Industry Development Policy (reported as AIDP 2025-30 in draft form) centered on localisation: getting more auto parts, including complex components like engines, transmissions, and battery management systems, manufactured inside Pakistan rather than imported. The goal was straightforward — less import dependency, lower vehicle prices over time, and a simplified tariff structure for imported vehicles, reportedly capping customs duty on completely built-up units at 15% over five years.

None of that takes effect yet.

Why It Stalled

The core disagreement, per reporting, comes down to how electric and hybrid vehicles get taxed. Pakistani officials reportedly proposed a low GST rate — around 1% for electric vehicles and 9% for hybrids — as an incentive to accelerate EV adoption. The IMF, as part of Pakistan's broader loan program, wants the standard 18% GST applied across the board, without special carve-outs for electrified vehicles.

With no agreement reached by the July 1 deadline, and Prime Minister Shehbaz Sharif reportedly expressing concern over the delay, the government opted to extend the current policy by a year rather than launch an unfinished framework.

What This Means If You're Buying a Car Right Now

In the short term: nothing changes structurally. The tariff cuts and localisation incentives that were expected to eventually pressure new-car prices downward are on hold. If you were waiting for the new policy specifically because you expected prices to drop, that timeline has moved — reporting from Bloom Pakistan suggests a possible relaunch attempt around August 2026, though nothing is confirmed.

For used-car buyers, this delay is mostly a non-event — used car pricing is driven far more by condition, mileage, and city-level supply/demand than by new-vehicle policy shifts. If anything, continued uncertainty on the new-car side tends to keep more buyers active in the used market rather than waiting.

We'll update this once the new policy is actually confirmed.