1.8m jobs at risk over auto policy

Every used car brought in from abroad displaces close to Rs1.5 million worth of locally manufactured components, PAAPAM said, directly squeezing domestic production capacity. The scale of the trade has grown substantially. Annual used-car imports reached an estimated 50,000 units last year, capturing nearly 30% of the domestic market,.

The association estimates the informal trade surrounding these imports has fuelled a black-money ecosystem worth approximately Rs200 billion, with the potential to divert overseas remittances away from formal banking channels and back into informal hundi and hawala networks. PAAPAM also pointed to compounding pressure from tariff policy.

Under the National Tariff Policy 2025-30, duties on used-car imports are being gradually reduced, from a 40% premium over new vehicles in the current fiscal year down to zero by FY30.

That reduction, combined with a cut in customs duty to 30% on new completely-built-up vehicles of 850cc or below announced in the 2026-27 budget, and depreciation allowances of up to 36%, is making imported used cars increasingly attractive to commercial traders, the association said.

Malik cautioned that scrapping the one-year non-transfer restriction would be especially damaging for parts manufacturers, who currently supply up to 65% of components by value to domestic vehicle assemblers.

PAAPAM has asked the prime minister and his economic team to ensure the final version of the Auto Policy 2026-31 keeps the non-transfer condition intact, so that overseas facilitation schemes serve their intended beneficiaries rather than commercial dealer networks operating outside the formal economy.