Pakistan Adds 11% Duty on 13 More Auto Parts
Islamabad has introduced an additional 11 percent customs duty on thirteen specific automobile parts and components, aiming to boost local manufacturing in the automotive sector. This adjustment extends the coverage of existing tariff protections for parts that are now being produced within Pakistan.
Expanded Tariff Protection for Local Auto Parts
The Economic Coordination Committee (ECC) approved the new levy following recommendations from the Revenue Division and Federal Board of Revenue. The decision updates the existing SRO 693(I)/2006 framework, through which the government governs customs duties on automotive parts based on their localization status.
The newly included auto parts subject to the 11% additional duty encompass a range of components such as radial and other tires for heavy commercial vehicles, license plates, side-reflector brackets, side plates, certain front decorative elements, footrests, wheel assemblies, windscreens, seat bases, tail boxes, center covers, and related plates.
Government’s Push for Localization in Auto Sector
This move aligns with Pakistan’s broader strategy to develop the domestic auto parts industry. The Revenue Division noted that over 1,200 tariff codes related to auto parts already receive differentiated additional duties depending on whether they are locally manufactured. The Engineering Development Board and Ministry of Industries have regularly recommended expanding this list as more parts production begins on Pakistani soil.
Officials emphasize that the increased tariff aims to support local vendors by reducing the price gap with imported parts, encouraging manufacturers to invest more in domestic production capabilities.
Impact on Pakistan’s Auto Industry and Consumers
For local manufacturers, the new duty offers enhanced protection against cheaper foreign imports, potentially fostering growth in production capacity, employment, and opportunities for export in the long term. However, automobile assemblers may face higher input costs if local alternatives remain limited or costly, which could affect their profit margins.
Consumers may not immediately notice changes in vehicle prices, but the policy’s success depends heavily on the quality and availability of domestic components over time. The government’s ongoing Auto and Auto Parts Manufacturing Policy 2026-31 remains focused on boosting localization, refining tariffs, and introducing greater competition to the sector.
For Pakistan, a thriving local automotive parts industry can help reduce dependency on imports, stabilize production costs amid currency fluctuations, and contribute to overall economic resilience.
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