KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has welcomed the newly approved Auto Policy 2026, saying the measures could help modernize Pakistan’s automotive sector, strengthen domestic manufacturing and expand the country’s presence in global automotive supply chains.
FPCCI President Atif Ikram Sheikh described the policy, approved by Prime Minister Shehbaz Sharif, as a significant step toward industrial development. He welcomed the government’s focus on integrating Pakistan’s local auto-parts industry with international markets.
New Investment and Manufacturing Opportunities
Atif Ikram Sheikh said the plan to attract at least five major anchor auto-parts manufacturers could help establish a stronger industrial ecosystem while bringing foreign investment and advanced technology into Pakistan.
He also welcomed the creation of specialized small and medium-sized enterprise (SME) clusters within the automotive sector, saying the initiative could strengthen local vendors and generate thousands of technical employment opportunities.
Export-Focused Incentives
The FPCCI president praised measures aimed at encouraging export-oriented automotive production.
He highlighted the proposed elimination of duties on equipment and auto parts imported specifically for export purposes, saying the move could reduce production costs and improve the international competitiveness of Pakistani automotive products.
He also supported the proposed establishment of an Auto Parts Export Council, saying dedicated institutional support would be important for expanding exports and accessing new international markets.
Digital Approvals and Local Value Addition
FPCCI also backed the policy’s emphasis on mandatory local value addition and the digitization of approval procedures involving the Engineering Development Board.
Atif Ikram Sheikh said reducing bureaucratic barriers and allowing contract manufacturing could improve operational efficiency and increase investor confidence in the sector.
He further welcomed the policy’s focus on the transition toward green automotive technology.
Incentives for Electric and New Energy Vehicles
The FPCCI president specifically welcomed incentives for New Energy Vehicles (NEVs) and Electric Vehicles (EVs).
According to the policy measures highlighted by FPCCI, sales tax on these vehicles has been reduced to 1%, while Federal Excise Duty, Capital Value Tax and withholding tax have been removed.
He said these incentives could support wider adoption of cleaner transportation. He also welcomed the increase in the financing limit for electric vehicles to Rs10 million, saying it could make EVs more accessible to consumers.
Atif Ikram Sheikh assured the government of the business community’s support for implementing Auto Policy 2026. He said FPCCI was ready to facilitate coordination among local manufacturers, international investors and government regulators to help achieve the policy’s industrial, economic and environmental objectives.