The Pakistani government is preparing a relief package for the country's automotive sector under the upcoming budget and the new auto policy, including measures such as reducing import duties and expanding incentives for new energy vehicles.

The proposed policy also aims to broaden its scope beyond battery-powered electric vehicles by including other new energy vehicles, such as hybrids. Proposals to impose a 5% customs duty on hybrid vehicle parts have also been put forward to streamline the tariff structure.

According to policy documents, the authorities plan to abolish additional customs duties while gradually reducing regulatory duties under the National Tariff Policy framework.

Under the proposals, the customs duty on auto parts may be set at 5%, while assembled vehicle units could be subject to a 10% duty. The government is considering fixing the customs duty on completely knocked-down (CKD) kits between 5% and 10%, depending on the category.

Electric bikes, rickshaws, and electric vehicles are likely to receive exemptions from certain duty requirements to encourage the adoption of cleaner transportation and to support the transition towards energy-efficient mobility.

The proposals are currently under consideration and will be reviewed in the coming weeks following meetings with lending entities.