Govt Bans Baggage Car Import Scheme as Auto Lobby Wins Major Policy Push

The ban on car import under the baggage scheme took effect on Tuesday after the Economic Coordination Committee (ECC) approved new restrictions aimed at narrowing loopholes in used-vehicle imports.

The move, which places tighter rules on the remaining Gift and Transfer of Residence Schemes, also reinforces the government’s long-standing controls despite repeated calls for openness in the car import market.

The ECC abolished the baggage scheme entirely and raised the minimum stay abroad requirement from 700 to 850 days for overseas Pakistanis who wish to send a vehicle home. Imported cars will remain non-transferable for one year, and the vehicle must originate from the same country where the sender resides. Commercial-import safety and environmental standards will now apply to both allowed schemes.

These steps may curb import volumes, but industry observers argue that limiting competition protects local assemblers who already earn substantial margins despite consumer complaints of high prices and limited choices. The IMF has previously urged Pakistan to liberalise used-car imports to enhance competition and reduce market distortions.

The ECC also approved a revision in petrol and diesel margins that will raise fuel prices by Rs. 2.56 per litre. Oil marketing companies and petroleum dealers received inflation-linked adjustments, half of which will be payable immediately.

READ MORE: ECC Approves Big Relief and New Rules for Vehicle Owners

Separately, the committee approved another financial injection for Pakistan International Airlines (PIA), clearing Rs. 2.5 billion to cover pensions and medical bills. With this addition, the government’s support for PIA in the current fiscal year will reach Rs. 34.7 billion.

Other decisions included restrictions on chloroform imports due to its hazardous nature and supplementary allocations for the Pakistan Digital Authority and the Housing and Works Division.