Govt Plans to Phase Out Personal Baggage Scheme for Used Cars

The Personal Baggage Scheme for used car imports in Pakistan may soon be abolished as the government looks to tighten regulations on remaining import schemes.

The move is part of a broader effort to curb the growing influx of secondhand vehicles.

The Ministry of Commerce has submitted a summary to the Economic Coordination Committee (ECC) recommending the end of the Personal Baggage Scheme. It also proposed stricter rules for the Transfer of Residence and Gift Schemes to prevent misuse by importers.

Local auto manufacturers have voiced concerns over rising used-car imports since December 2024. Industry data shows Pakistan imported 45,758 vehicles between December 2024 and October 2025, with nearly 99 percent coming from Japan. Imports from other countries were minimal, including Thailand, the US, Germany, Australia, China, Jamaica, and the UAE.

The auto sector argues that Pakistan’s policies are far more liberal than neighboring countries. India, for instance, allows almost no used-car imports, Vietnam’s share is just 0.3 percent, and Thailand’s is 1.2 percent. Industry experts warn that after June 2026, lifting age limits on imports could flood the market with older vehicles, threatening local manufacturers.

Pakistan’s automotive industry, which employs 2.5 million people, operates around 1,200 factories, generates Rs. 500 billion in annual government revenue, and attracts about $5 billion in foreign investment.

During the past year, local vendors reportedly lost around Rs. 50 billion, while informal imports of used cars also impacted foreign exchange.

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The government is expected to finalize decisions on the Personal Baggage Scheme and related policies in the coming weeks as part of its new Auto Policy, aimed at strengthening domestic manufacturing while balancing import regulations.