PAMA seeks review of Gift Scheme to prevent its misuse

The Pakistan Automotive Manufacturers Association (PAMA) has called on the government to review the Gift Scheme for used vehicle imports, expressing concern over the scheme's alleged misuse. The scheme's usage surged significantly in the first nine months of 2026, with imports jumping from just seven units in May to over 2,000 units by the end of September.

This surge accounted for nearly 100% of all used vehicle imports during this period. PAMA's Director General, Razi ur Rehman, wrote to Prime Minister’s Adviser on Industries and Production Haroon Akhtar Khan, requesting immediate safeguards against misuse and a reassessment of policies that encourage excessive imports of used vehicles, at the expense of domestic manufacturing.

Rehman emphasized that Pakistan’s automotive industry had invested over a trillion rupees in developing local manufacturing capabilities and achieving localisation. However, he warned that the expansion of used vehicle imports under the Gift Scheme threatens these investments and undermines the government’s industrialization and import substitution goals.

The association expressed particular concern over recent tariff reforms, which reduce import duties and depreciation on used completely built-up vehicles. These reforms, according to PAMA, undermine the competitive space for domestic manufacturers, discouraging local manufacturing, technology transfer, employment generation, and future investment.

Rehman highlighted the shift in import patterns from the Baggage Scheme to the Gift Scheme, suggesting widespread and coordinated activities to certify and approve vehicles for import under the Gift Scheme. PAMA stressed the need for the government to scrutinize the existing mechanisms to ensure the Gift Scheme is used strictly for its intended purpose and not as a tool for commercial vehicle trading.