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Pakistan allows import of used cars as auto manufacturers warn of ‘devastating’ impact

Pakistan allows import of used cars as auto manufacturers warn of ‘devastating’ impact
This photograph taken on November 11, 2024 shows a car dealer speaking to a customer near a Toyota Hilux pick-up truck (front) parked at his showroom yard in Karachi, Pakistan. (AFP/File)
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Pakistan allows import of used cars as auto manufacturers warn of ‘devastating’ impact

Pakistan allows import of used cars as auto manufacturers warn of ‘devastating’ impact
  • Decision is in line with IMF’s requirement for Pakistan to liberalize trade, relax restrictions on import of used cars
  • Auto industry stakeholders fear move will cause irreparable losses, trigger the closure of manufacturing plants

KARACHI: Pakistan’s top economic decision-making body on Wednesday approved the import of used cars, drawing sharp criticism from industry stakeholders, who warned the move would have a “devastating” effect on local manufacturing in the country. 

The decision was taken after a meeting of the Economic Coordination Committee (ECC) which was chaired virtually by Finance Minister Muhammad Aurangzeb from New York. The ECC said initially only vehicles not older than five years will be allowed to be imported until Jun. 30, after which the age limit will be removed. 

The decision comes on the eve of the IMF mission’s arrival in Pakistan for its second review of the country’s economy under a $7 billion loan program. The global lender, among various other stipulations, requires Islamabad to liberalize its trade and lift restrictions on the import of used cars.

“The ECC considered a summary regarding the commercial import of used vehicles and, after detailed discussion, accorded approval to the proposals,” the finance ministry’s statement said. 

It said the ECC has approved changes to the Import Policy Order, 2022, to allow the commercial import of used vehicles subject to strict environmental and safety standards compliance.

The committee approved the imposition of a 40 percent regulatory duty (RD) in addition to existing customs duties on the import of vehicles less than five years old.

The additional duty will remain in place until June 2026 and will keep decreasing by 10 percentage points every year to become zero by fiscal year 2029-30, the statement added. 

‘DEVASTATING IMPACT’

Auto manufacturers, assemblers and part makers in Pakistan like Toyota, Honda, Suzuki, Hyundai, Kia Motors and Changan Automobile fear the move would inflict heavy losses on their business and ultimately lead to the closure of their manufacturing plants.

“It is a major and fundamental change in the import policy of the country,” Abdul Waheed Khan, director general at Pakistan Automotive Manufacturers Association (PAMA), told Arab News.

“Notwithstanding 40 percent extra tariff, it would flood the market with used vehicles and destroy the local manufacturing,” he noted. 

Pakistan’s dollar shortages and resultant inventory losses made recent years challenging for local car makers, whose production declined by 51 percent to 111,402 units in fiscal year 2025, from 226,433 units in fiscal year 2022, when production peaked to a three-decade high, according to PAMA’s data.

The Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) said it is “extremely concerned” about the ECC decision.

“It will have a devastating impact on an industry which is providing jobs to 300,000 people directly and 1.83 million Pakistanis indirectly,” Shehryar Qadir, the association’s senior vice chairman, told Arab News.

PAAPAM fears the closure of 1,200 companies that have been manufacturing and supplying steel, plastic, rubber, copper, aluminum and auxiliary parts to all 13 car assemblers in Pakistan.

“It will negatively impact upcoming investments in localization and in assembly of electric vehicles in the country,” he warned.

The association said it would “wait for the conditions and rationale behind this decision.”

Topline Securities analyst Shankar Talreja said low-end cars or hatchbacks were primarily dominating Pakistan’s used car imports.

“This [approval] may result in higher imports of used cars, as currently cars are imported using baggage or gift schemes, which restrict bulk purchase,” he said. “Similarly, with the subsequent decline in RDs over the year, the imports of mid-end cars may also rise”.

The analyst said Pakistan’s dwindling foreign exchange reserves, which stood at $14 billion last week, will be strained as imports of used cars increase. 

“(The) reserves will be used against this decision,” Talreja said. 

However, he said that since the government has imposed some qualitative/non-tariff barriers, it would provide some respite to car makers and Pakistan’s forex reserves. 

Khan, however, does not see any respite for the auto manufacturing industry.

“One vehicle’s import means one vehicle’s loss at the production line,” he said. “They are rivals.” 


Pakistan says adaptation plan hampered by ‘inadequate’ international climate finance

Pakistan says adaptation plan hampered by ‘inadequate’ international climate finance
Updated 24 September 2025

Pakistan says adaptation plan hampered by ‘inadequate’ international climate finance

Pakistan says adaptation plan hampered by ‘inadequate’ international climate finance
  • Prime Minister Shehbaz Sharif speaks at Climate Summit on sidelines of ongoing UNGA session
  • Deadly monsoon rains in Pakistan since Jun. 26 have killed over 1,000 people, injured even more 

ISLAMABAD: Pakistan’s National Adaptation Plan is severely hampered by “inadequate” international climate finance, Prime Minister Shehbaz Sharif said on Wednesday, as Islamabad seeks easier access to climate funds for vulnerable nations. 

Sharif was speaking at the Climate Summit held at the sidelines of the 80th session of the United Nations General Assembly in New York. The summit is a targeted high-level event where heads of state, government leaders, businesses and civil society members present concrete pledges and national climate plans.

Pakistan, which contributes less than 1 percent to global greenhouse gas emissions, suffers frequently from climate-related disasters. The South Asian country has reported over 1,000 deaths since the onset of the monsoon season in June due to rain-related incidents such as floods and landslides. 

Pakistani officials have frequently said developing countries face mounting climate threats, despite minimal emissions, and need more support from global financial institutions.

“The implementation of Pakistan’s National Adaptation Plan is hampered and hampered severely due to inadequate international climate finance,” Sharif said during his address. 

The Pakistani prime minister said Islamabad aimed to increase its share of renewable energy through hydropower to 62 percent of the country’s energy mix by 2035. He said the South Asian country also aimed to expand its nuclear energy capacity by 1,200 megawatts by 2030 and establish 3,000 charging stations for electronic vehicles by then.

Sharing details of Pakistan’s climate adaptation measures, the Pakistani prime minister said the use of solar energy in the country has grown seven-fold since 2021, adding that 23,000 hectares of mangroves have also been restored. 

Sharif said Pakistan was willing to do its part to battle climate crisis, expressing the hope that the international community would also fulfill its commitments. 

“My last line is, loans over loans, adding to loans, is not the solution,” he concluded. 

Cataclysmic floods triggered by unusually heavy rains and the melting of glaciers in 2022 killed over 1,700 people, destroyed critical infrastructure and large swathes of crops. It inflicted damages of over $30 billion, Pakistan estimates. 

Experts linked the crisis to climate change, warning that Pakistan could suffer even more devastating effects in the years to come. 


More Afghans arrive in Germany after limbo in Pakistan

More Afghans arrive in Germany after limbo in Pakistan
Updated 24 September 2025

More Afghans arrive in Germany after limbo in Pakistan

More Afghans arrive in Germany after limbo in Pakistan
  • Afghans were accepted under refugee scheme set up by previous German government
  • Scheme, however, was frozen after conservative Chancellor Friedrich Merz took office in May

Berlin: A new group of Afghans who had been promised refuge in Germany arrived in the country on Wednesday, the latest to escape months of limbo in Pakistan.

An interior ministry spokesman told AFP that 28 Afghans landed at Hanover airport in the early afternoon.

The Afghans were accepted under a refugee scheme set up by the previous German government which was frozen after conservative Chancellor Friedrich Merz took office in May.

Since then around 2,000 Afghans have been stuck in Pakistan, where they have been threatened with deportation back to Afghanistan.

Some of those affected have mounted successful legal challenges against the German government, forcing the authorities to allow them entry.

A first group of 47 Afghans who won their cases arrived in Germany earlier this month, and those who came on Wednesday had also been successful in the courts.

According to the initiative Airbridge Kabul, set up to help those affected, the latest group — five men, 10 women and 13 children — arrived on a commercial flight from Islamabad.

However, around 250 Afghans who had been waiting to go to Germany have been deported from Pakistan in recent weeks.

A foreign ministry spokesman said on Wednesday that none of them has as yet been able to return to Pakistan.

The German scheme was aimed at Afghans who had worked with German forces in Afghanistan or who were deemed at particular risk from the Taliban, for example journalists, lawyers and human rights activists.

Since Merz’s conservative-led coalition government took power in May, it has put the process on ice as part of a wider push to toughen immigration policy.

Thousands of Afghans waiting in Pakistan to resettle in the United States and several other Western countries are facing a similar predicament as sentiment toward refugees hardens.

Pakistan has been mounting its own crackdown on Afghans without residence permits since 2023, with officials insisting the country cannot be a “transit camp” for those waiting to resettle in the West.


Security forces kill 13 militants in Pakistan’s northwest near Afghanistan border

Security forces kill 13 militants in Pakistan’s northwest near Afghanistan border
Updated 24 September 2025

Security forces kill 13 militants in Pakistan’s northwest near Afghanistan border

Security forces kill 13 militants in Pakistan’s northwest near Afghanistan border
  • Operation carried out in northwestern Daraban area of Dera Ismail Khan district on Sept. 24, says military
  • Pakistan military says militants were involved in facilitating suicide bombing in 2023 which killed 23 people 

ISLAMABAD: Pakistani security forces killed 13 militants during an intelligence-based operation (IBO) in the country’s northwestern Khyber Pakhtunkhwa (KP) province bordering Afghanistan, the military’s media wing said on Wednesday. 

The Inter-Services Public Relations (ISPR) said security forces carried out the IBO in the Daraban area in the northwestern Dera Ismail Khan district on the reported presence of Pakistani Taliban militants. 

“During the conduct of operation, own troops effectively engaged the khwarij location and resultantly, 13 Indian sponsored khwarij were sent to hell,” the ISPR said. 

Pakistan’s military frequently uses the word “khwarij” for the Pakistani Taliban or Tehreek-e-Taliban Pakistan (TTP). 

It said the slain militants were actively involved in numerous “terrorist” activities, which included facilitating a suicide bombing in Daraban in December 2023 which killed 23. The military’s media wing also said the militants were involved in the abduction and target killing of government officials and innocent civilians.

“Sanitization operation is being conducted to eliminate any other Indian sponsored kharji found in the area,” the ISPR added. 

Pakistan’s military has been carrying out intense operations in the country’s KP and southwestern Balochistan provinces. Last week, Pakistan security forces killed 31 militants in two separate raids in the northwestern Lakki Marwat and Bannu districts.

The Pakistani Taliban and other militant groups have frequently targeted security forces convoys and check-posts, besides carrying out target killings and kidnappings of law enforcers.

Islamabad has frequently accused Afghanistan of allowing militants to use its soil for attacks against Pakistan. It also accuses India of backing militant groups against, while Kabul and New Delhi both deny Islamabad’s allegations.


Gilgit-Baltistan traders end months-long protest at China border as Pakistan grants tax relief

Gilgit-Baltistan traders end months-long protest at China border as Pakistan grants tax relief
Updated 24 September 2025

Gilgit-Baltistan traders end months-long protest at China border as Pakistan grants tax relief

Gilgit-Baltistan traders end months-long protest at China border as Pakistan grants tax relief
  • Hundreds of traders staged sit-in protest near northern border with China since July, demanding tax relief for region
  • Pakistan last year collected around $57.35 million in taxes from northern Sost port near China border, says GB official

 ISLAMABAD: Traders in Pakistan’s northern Gilgit-Baltistan (GB) announced ending a two-month-long protest near the country’s border with China on Wednesday, after the federal government accepted their demands and announced significant tax exemptions for the region’s residents. 

GB’s importers, exporters, small traders, customs clearing agents and members of the area’s local chamber of commerce launched a sit-in protest in late July at the Sost dry port. Protesters demanded the government exempt traders from taxes as the semi-autonomous region was a “non-tariff” area and therefore should be exempt from sales and income taxes. 

The protest had brought trade between Pakistan and China via the northern Khunjerab Pass to a halt, with the movement of people also adversely affected. Prime Minister Shehbaz Sharif formed a committee on Aug. 17, headed by Energy Minister Sardar Awais Leghari, to resolve the crisis. 

Federal Bureau of Revenue (FBR) Chairman Rashid Mahmood Langrial explained at a news conference that previously, duties and consumption taxes used to be collected from GB traders at the Sost port near the border with China.

“While there is no consumption tax for GB, we did not have a mechanism to ensure that the exemption is offered only to the local population,” Langrial told reporters at the news conference. He was flanked by Leghari, GB Chief Minister Hajji Gulbar Khan and Senator Saleem Mandviwalla.

“Under the new mechanism, sales tax, income tax and federal excise duty will no more be collected at the border, but custom duty and regulatory duty will still be collected,” he added. 

As per the agreement, a copy of which is available with Arab News, the tax exemptions will only be offered to local firms registered with the GB government. The total amount of tax exemptions shall not exceed Rs4 billion [$14.34 million] per annum.

The GB government will now implement the agreement and ensure that its various clauses are implemented.

Ashafaq Ahmad, a leader of the region’s traders who is also the chairman of the GB Chamber of Commerce and Industry, welcomed the deal. 

“We are thankful to the government for granting us tax exemptions and hope the written agreement will be implemented,” Ahmad said. 

He called on traders to resume cross-border trade activities at the Sost border starting Thursday, expressing hope that the tax relief would rejuvenate commercial momentum and strengthen regional trade ties. 

Faizullah Faraq, GB chief minister’s spokesperson, told Arab News that the agreement would impact trade worth over Rs100 billion [$358.42 million] between Pakistan and China through the Sost dry port. 

He said last year, the government collected around Rs16 billion [$57.35 million] in taxes from the Sost border alone.

Speaking at the press conference, Mandviwalla said the prolonged protest had worried Pakistan and China. 

Pakistan’s trade with China is worth around $20 billion but the balance is heavily tilted in Beijing’s favor.

The commerce ministry this week told a parliamentary panel that Pakistan’s imports from China peaked at $20.8 billion in 2020–21, against exports of around $3.1 billion.

Ministry officials told the National Assembly Standing Committee on Commerce that figures from last fiscal year (2024-25) show that Pakistan’s imports from China stand at $17 billion against the country’s exports to Beijing, which were recorded at $2.7 billion. 

The committee voiced deep concern over Pakistan’s widening trade deficit with China and highlighted the need to shrink it through value addition measures and institutional reforms.


Pakistan, Syria agree to form joint working group to boost agricultural cooperation

Pakistan, Syria agree to form joint working group to boost agricultural cooperation
Updated 24 September 2025

Pakistan, Syria agree to form joint working group to boost agricultural cooperation

Pakistan, Syria agree to form joint working group to boost agricultural cooperation
  • Syria’s Ambassador Dr. Ramez Alraee meets Pakistan’s food security minister in Islamabad
  • Working group to fast-track collaboration in agricultural research, modern farming practices

ISLAMABAD: Pakistan and Syria have agreed to form a Joint Working Group to fast-track collaboration in agricultural research, modern farming practices and water resource management, Pakistan’s food ministry said on Wednesday, as Islamabad seeks closer cooperation with Damascus. 

Food Security Minister Rana Tanveer Hussain met Syria’s Ambassador to Pakistan Dr. Ramez Alraee in Islamabad, where both sides discussed strengthening bilateral cooperation in agriculture, trade and cultural exchanges. 

Pakistan has sought closer trade and economic cooperation with Syria recently. Last week, Pakistan’s Finance Minister Muhammad Aurangzeb met Alraee, during which Aurangzeb hoped the lifting of US sanctions would open up bilateral trade and investment opportunities. 

“To institutionalize and fast-track cooperation, both sides agreed to form a Joint Working Group that will explore practical avenues of collaboration, including modern farming practices, water resource management, capacity building and agricultural trade facilitation,” Pakistan’s food ministry said in a statement. 

Hussain said Pakistan is ready to share its expertise and extend technical support to Syria in modern agriculture and food security strategies. He noted that such initiatives would not only boost bilateral trade but also contribute to sustainable development and prosperity in the region.

“Ambassador Dr. Ramez Alraee appreciated Pakistan’s continued support and welcomed the proposal of establishing a Joint Working Group, assuring Syria’s commitment to work closely with Pakistan in areas of mutual benefit,” the statement said. 

Agriculture is the backbone of Pakistan’s economy and contributes around 23 percent to its GDP. It also employs roughly 37.4 percent of the labor force, according to the Food and Agriculture Organization.