Pakistan Ends Age Limit on Used Car Imports: The Gift Scheme Route and Domestic Auto Industry's Concern

On that October 2026 morning when the Commerce Ministry's Office Memorandum went out in Islamabad, a customs clearing agent in Karachi read the document three times on his phone. What stopped him was not the language — it was the quiet fact that the limit he had been waiting four months to understand had simply ceased to exist. The five-year age condition on commercial imports of used vehicles would not apply after June 30, 2026. It was not a new policy; it was the fulfilment of a clause always written into the original order.

But if this were only about removing an age cap, the Pakistan Automobile Manufacturers Association would not have taken its concern to the Commerce Secretary's door. The real issue lies in the scheme through which used cars are entering the country — the Gift Scheme. And the real question is whether that scheme has now moved beyond the purpose for which it was created.

From Baggage to Gift: the route changed in four months

The hardest number in this whole dispute is this: in May 2026, only 7 units of used vehicles were recorded under the Baggage Scheme. By September 2026, under the Gift Scheme, that figure had risen to 2,238 units. In four months, almost the entire flow shifted from one channel to another. When a scheme fills this rapidly, the question is not whether demand has risen — the question is which door has become the cheapest to walk through.

This is the core of PAMA's argument. It says the Gift Scheme has shifted from a personal-use facility to a channel for commercial imports, with overseas certification and verification processes being used in a coordinated way. The allegation has not been independently verified — and that is the weakest link in the whole story. But when 98 per cent of used imports start arriving through a single scheme, it becomes hard for customs and policymakers alike to ignore.

What is legally clear, and what is not

the Commerce Ministry's argument is straightforward. The five-year age condition in the original order was time-bound to June 30, 2026, and its removal was pre-written. The October 30 Office Memorandum is an implementation act. The FBR asked on October 23 what treatment would apply post-July 1 to this category, and the Commerce Ministry replied within seven days. Institutionally, the sequence was swift and clean.

But where legal clarity ends, the real difficulty begins. The age cap was removed, yet environmental and safety conditions remained. That means the entire burden now shifts onto standards enforcement — standards that, per PAMA, are being certified by overseas agencies while the actual inspection on the ground grows thinner. Why did the FBR seek clarification? The simple answer: after June, it was not clear at customs stations across the country which vehicle should be stopped and which allowed through.

The industry's argument is not only about duty

PAMA did not limit the matter to the FBR; it wrote directly to the Commerce Secretary. That signals escalation to the political level, not a technical fix. And its ammunition is not empty. Thirteen plants, 31 brands, roughly 60 per cent localisation and more than a trillion rupees of investment — this industry has numbers on its side, not only sentiment.

That is its real weapon. When PAMA says tariff relief and technical depreciation pushed up to 60 per cent are narrowing the domestic manufacturer's competitive space, it is not merely talking about trade policy — it is invoking the national project of industrialisation and import substitution. The move is being framed as weakening economic sovereignty in the name of facilitation.

One figure reinforces the industry's case: around Rs 60 billion a year spent on auto-parts imports. If used-vehicle imports rise, this link puts direct pressure on the domestic component industry — the spine of the localisation claim.

What the outside view gets wrong

Seen from Western media or from economic columns alone, two shallow conclusions emerge. First — this is the old free-trade-versus-protectionism fight, with industry standing against consumer interest. Second — this is perhaps a change of intent, with the government suddenly lifting a limit.

Both are partial. The limit was not lifted suddenly; it was expiring on its own. And it is also true that cheaper vehicles should benefit consumers — but that benefit fades when the same facility becomes a business for certificate brokers. The government speaks of facilitating importers, while PAMA alleges a channel for commercial imports is opening. No independent data sits between those two statements yet.

Here another point emerges, the most important of all. The sharpest figures in the entire dispute — 2,238 units and the 98 per cent share — come from the very party that stands to lose. The FBR has not yet published its own customs data. The whole debate rests on a single side's claims, and that absence of transparency is not a small flaw.

The real story hidden in the used-car fight

An importer in Karachi told me the real question is not the car — it is the paperwork. When the five-year age limit goes and environmental and safety checks are not fully enforced on the ground, two things happen. One, vehicles enter that burden road safety and air quality. Two, domestic manufacturers, who comply with standards, must compete against those who bypass them.

The weakest part of PAMA's case is not that it is dressing up protectionism as safety. The weakest part is that its numbers remain unverified. And the government's weakest part is that the responsibility it took for clearing post-June uncertainty does not show in a clear message reaching customs officers.

What to watch next

The next real signal will come in the FBR's monthly import data. If official numbers align with PAMA's, the question narrows to certificate verification — and the fix is technical. If the gap is wide, the debate moves elsewhere. A second signal lies in the Gift Scheme review, now the true pivot. A third is buried in the customs data not yet released.

Meanwhile, the most compelling character in this story is the customs officer who stopped two vehicles on a Tuesday afternoon and asked for certificates. Do not ask what he decided. Ask whether he had a clear basis on which to decide at all.