New auto policy 2026-31 to save Pakistan Rs288bn

More details of Pakistan’s proposed Auto Policy 2026-31 have emerged, with the five-year plan projected to save the national exchequer around Rs288 billion while generating total additional economic benefits of more than Rs1,764 billion.

The draft of the new auto policy has also been shared with the International Monetary Fund (IMF) as the government prepares reforms aimed at strengthening local manufacturing and industrial development.

According to the policy document, the government expects an additional Rs485 billion in revenue through federal excise duty under the proposed reforms.

The document estimates expenditure of Rs196 billion on auto sector reforms, resulting in an expected net fiscal benefit of Rs288 billion over the 2026-31 period.

Around Rs193 billion is expected to be spent on the proposed tax drawback scheme during the five-year period.

Major savings expected from lower fuel imports

The policy projects more than Rs1,226 billion in savings through a reduction in fuel imports. The government also estimates economic benefits of around Rs338 billion from additional energy use at the local level.

A further Rs27 billion-plus in revenue from carbon credits has been included among the expected benefits of the new automotive policy.

The draft also factors in the wider public health impact of the proposed reforms. According to the document, public health benefits over the five-year period are expected to reach around Rs173 billion.

Combined with the projected fiscal and energy-related gains, the policy’s total additional economic benefits are estimated to exceed Rs1,764 billion.