The Pakistan Association of Automotive Parts & Accessories Manufacturers (Paapam) has warned that the IMF’s push for trade liberalisation, including tariff cuts and commercial imports of used vehicles, could severely damage Pakistan’s auto sector. The association stressed that such measures risk job losses, reduced investor confidence, and disruptions to the country’s localisation of new energy vehicles (NEVs).
Paapam Chairman Usman Aslam Malik said,
“Trade liberalisation must not lead to deindustrialisation and fiscal leakage.”
The body argued that large-scale used vehicle imports, many lacking modern safety and emissions compliance, could derail sustainability goals and weaken the local industry’s capacity to grow.
The association also flagged loopholes in current schemes where vehicles imported under overseas Pakistanis’ names are sold domestically, bypassing taxes and regulations. Paapam Senior Vice Chairman Shehryar Qadir cautioned, “We cannot afford to expand mechanisms that enable tax evasion.”
Paapam further raised concerns that reduced tariffs could slash government revenues while hurting local manufacturers, ultimately leading to layoffs across the sector. It called for a gradual reform strategy with safeguards, workforce skill development, and incentives for domestic production.
Highlighting international practices, the association urged policymakers to adopt a phased approach, ensuring reforms balance global competitiveness with Pakistan’s industrial realities. Malik added that while Paapam supports economic reforms and sustainability goals, they must not compromise the future of Pakistan’s automotive industry.