Five-Year Age Cap Removed: A New Era for Commercial Used-Vehicle Imports in Pakistan

Pakistan's Ministry of Commerce, in an Office Memorandum issued on 30 October 2026, has confirmed that the five-year maximum age limit on commercially imported used vehicles ceased to apply after 30 June 2026. The memorandum resolves months of uncertainty that had left customs officials and importers in operational limbo. The sequence of events is clear. On 23 October 2026, the Federal Board of Revenue asked the Commerce Ministry for formal clarification on how such imports should be treated after 30 June 2026. Within a week, on 30 October, the Ministry replied and the disputed question was settled at a technical level. Notably, the exchange between the two institutions was orderly, with no confrontation and no ambiguous circulars. It would be a mistake to read this as a new policy. The original permission was explicitly time-boxed to 30 June 2026 and contained a pre-agreed removal clause. The memorandum is therefore an implementation act rather than a fresh policy decision. The legal mechanics are internally consistent and low on ambiguity, and the effective date has been kept retroactive to 1 July 2026, meaning all imports after that date fall under this arrangement. At the same time, it has been made clear that environmental and safety standards remain in force. Compliance with the standards set by the Engineering Development Board and the Ministry of Industries stays mandatory. A structural shift has occurred here: with the age cap gone, the regulatory burden has moved entirely onto enforcement of standards. If enforcement is weak, quality and safety risks will flow straight into the market. The real dispute is not the age limit but the integrity of the Gift Scheme. In a letter to the Secretary Commerce, the Pakistan Automobile Manufacturers Association (PAMA) has alleged that the scheme is being systematically misused. According to the association's figures, roughly 98 percent of all used-vehicle imports in September 2026 arrived under the Gift Scheme. An even more striking trend is that units arriving under the Baggage Scheme rose from 7 to 2,238 between May and September 2026. A shift of that kind within four months is not a signal of genuine demand but a textbook case of channel arbitrage, a systematic migration from one window to a more favourable one. PAMA describes it as coordinated certification abuse involving misuse of certificates issued overseas. PAMA's position is not limited to complaint; it also carries concrete bargaining power. According to the association, more than Rs1 trillion has been invested in the country's automotive sector, 31 brands are present in the market, 13 manufacturing plants are operating, and localisation has reached around 60 percent. Using these figures, the association reframes a narrow customs question as a broader national industrial-policy issue. The second front concerns tariff reform. PAMA argues that duty cuts and the existing depreciation mechanism, which in some cases reaches 60 percent, are narrowing the competitive space available to domestic industry. The association says these measures artificially reduce the landed cost of imported vehicles and undermine the viability of local assembly. A related concern is the rising import bill for auto parts. Estimates put the annual foreign-exchange outflow on this head at up to Rs60 billion. This directly weakens the localisation objective and allows value addition to leak out of the supply chain. Assessing overall risk, three factors combine to make the situation serious: the unconditional removal of the age cap, the explosive rise in Gift Scheme volumes, and unresolved questions of certification integrity. The first is an opportunity for importers, the second a signal of abuse, and the third a risk that no independent investigation has yet addressed. The risk of industrial erosion, fiscal pressure and a customs-integrity crisis are all rated high. Looking at likely scenarios, the base case is continued import growth under the Gift Scheme with friction persisting between government and industry. The worst case would be a public certification-abuse scandal forcing abrupt re-regulation, harming both importers and policy credibility. A major caveat is essential here. All the quantitative figures above, particularly the 98 percent share and the rise from 7 to 2,238 units, come from a single party, PAMA, and have not been independently verified against publicly released FBR customs statistics. The article's structure is balanced, with facts from government and objections from industry, but the evidence is asymmetric, because all the alarm data originates with the complaining party. A window of roughly five months is insufficient for any structural conclusion. Three indicators will be decisive for monitoring. First, FBR's monthly used-import reports: if official data diverge from PAMA's claim, the entire abuse narrative will need reassessment. Second, the Gift Scheme review and any statutory regulatory order amendments: new certification rules will directly shape import volumes. Third, changes in the National Tariff Policy: any further adjustment to duties or depreciation will immediately affect the domestic industry's competitive space. In a broader sense, the case exposes a larger tension: short-term consumer benefit and import facilitation set against medium-term loss of industrial capacity, employment and localisation. The government's stated intent is to facilitate importers, while industry fears that the same facilitation will become a cover for commercial trade. The gap between these two narratives has not yet been closed by any independent data, and that gap will be the most important policy test of the coming months.