THE government’s effort to restrict used car imports appears to be faltering. So suggest the numbers. Despite tighter conditions and the abolition of the personal baggage scheme, used vehicles continue to enter the country in growing numbers through the gift scheme. More than 2,000 vehicles reportedly arrived in October alone. The figures suggest that restrictions have failed to stop the misuse of facilities meant for overseas Pakistanis. Imports of completely built-up (CBU) vehicles, including new and used cars, increased 40pc to $126m in the first quarter of this fiscal. This comes as the country struggles to contain its import bill and rebuild forex reserves. Every additional dollar spent on imported used cars adds to pressure on the external account. The concern is greater when such imports serve commercial interests rather than genuine national needs.

There are also serious questions about tax collection. Besides, payments are made through informal channels, while domestic sales take place largely in cash. It means that the government is losing revenue through undeclared transactions. The bigger concern is the damage to the domestic auto parts industry employing hundreds of thousands of workers directly and indirectly. When imported vehicles replace locally assembled ones, demand for these parts falls. The resulting loss of business threatens investment, employment and the progress made towards localisation. The new auto policy adds to those concerns by making imported CBU vehicles and parts cheaper. Assemblers may find it easier to source components from foreign suppliers rather than invest in local manufacturing. This would weaken an industry that has spent years building production capacity. There is a legitimate case for greater competition in the automobile market. Buyers deserve better quality and more affordable vehicles. Protecting an inefficient industry is not sustainable. But neither is encouraging imports that drain foreign exchange, weaken tax collection, put domestic jobs at risk, and turn the country into a junkyard.

Published in Dawn, November 13th, 2026