ISLAMABAD: The government has extended the existing auto policy for another year after negotiations with the International Monetary Fund (IMF) and the Tariff Policy Board failed to yield consensus on a new framework.
Officials confirmed that consultations with the IMF and other relevant institutions will continue in an effort to finalize a fresh policy package.
According to sources in the Ministry of Industries and Production, auto manufacturers have not met the prescribed export targets, nor have they ensured compliance of locally produced vehicles with global standards.
The ministry, insiders say, struggled to defend the proposed policy during talks with the IMF, prompting the Prime Minister to direct officials to make the new framework more investor-friendly.
The proposed auto policy seeks to generate employment opportunities and stimulate industrial activity, while mandating world-class safety standards for locally manufactured vehicles. Companies failing to meet these requirements will face penalties.
The draft also includes special incentives for electric vehicles, plug-in hybrids, and hybrid models, with plans to enforce 62 global safety benchmarks across both imported and domestic vehicles.
Meanwhile, consultations are currently underway with the Federal Board of Revenue, Ministry of Commerce, Ministry of Law, and Ministry of Science and Technology to refine the policy.
Officials say the new framework aims to encourage modern technology adoption, boost exports, and attract investment in the auto sector. The government insists the policy will prioritize consumer interests by ensuring safe, quality, and environmentally friendly vehicles.
