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KARACHI: Pakistan’s automotive industry has raised concerns over a critical issue caused by the Finance Act 2026-27, as the new tariff structure now makes importing a fully assembled vehicle more economical than manufacturing one domestically.
In an urgent appeal to the prime minister, the Pakistan Automotive Manufacturers Association (PAMA) — representing 16 assemblers producing over 100 vehicle models under 31 international brands — has requested immediate intervention, warning that the anomaly threatens to reverse decades of industrial progress.
Under the new tariff regime, imports of completely built units (CBUs) below 800cc would attract a minimum customs duty of just 30 per cent, and commercially imported parts at 25pc. Yet completely knocked down (CKD) kits — the very inputs used by local assembly plants — carry 32pc (30pc customs duty plus a 2pc additional duty), while localised parts face duties of up to 46pc.
The structure actively rewards imports and penalises localisation, domestic value addition and technology transfer — the very objectives every automotive policy of the past three decades has sought to advance.
