Islamabad: Omais Khattak, President Islamabad Industrial Association, has welcomed the Federal Government’s new 5-Year Auto Policy 2026-31. He stated that following consultations with the IMF, the draft will be presented to the Economic Coordination Committee (ECC) and the Federal Cabinet for approval. According to him, the implementation of the new policy is likely to result in a reduction in the prices of locally manufactured vehicles, providing direct relief to consumers.
Highlighting a major consumer-friendly measure, President IIA said that after booking, consumers will no longer be required to pay any additional price, and the responsibility for any price increase will now lie with the company.Furthermore, it will be mandatory for companies to inform customers of the delivery date at the time of booking. He described this as a significant step toward protecting consumer rights.
Omais Khattak added that the proposed policy includes various incentives to promote Electric Vehicles. These include the exemption of Federal Excise Duty, Capital Value Tax, and Withholding Tax on EVs, imposition of only 1% customs duty on charging station equipment, and a recommendation to set the loan limit for EVs at PKR 10 million with a tenure of five years.
On the broader industrial impact, he noted that the policy proposes a phased reduction of up to 80% in customs duty on conventional vehicles. It also sets export targets of 15% for tractor, motorcycle, rickshaw manufacturers and auto parts, and 20% for car manufacturers. Companies achieving these targets will be granted incentives, while those failing to meet them will face additional customs duty penalties.
The President further stated that the government estimates total financial benefits of PKR 1,764 billion over five years from this policy. This includes PKR 288 billion in net profit, PKR 485 billion from additional Federal Excise Duty, and savings of over PKR 1,226 billion in fuel imports.
Expressing optimism, Omais Khattak said that after receiving the Prime Minister’s approval, the policy is expected to be implemented soon, which will contribute to industrial growth, increased investment, and higher exports.
