Amendment to Import Policy Order 2022: Govt to treat vehicles with 2,000km mileage as new ones

ISLAMABAD: The government has enforced two decisions by promulgating Statutory Regulatory Orders (SROs) for allowing import of vehicles up to 2,000 kms from earlier limit of 500 kms and secondly allowed exports of flour from the imported wheat.

According to SRO 430 issued here by Ministry of Commerce, in exercise of the powers conferred by sub section (1) of section 3 of the Imports and Exports (control) Act 1950, the federal government is pleased to direct the following further amendment shall be made in the Import Policy Order 2022 namely: “In the aforesaid order in paragraph 2 in clause (h) for the figure 500 the figure of 2000 shall be substituted.”

Sources said that this change in the import policy of vehicles has raised eyebrows, people wondering why such a sudden change was made effective just few months ahead of the 2024-25 budget.Earlier, the definition of a new imported car was one that had a mileage of 500 kilometres after the car is booked from a manufacturing company abroad. Now the government has classified the newly imported car’s definition as one that has travelled up to 2,000 kilometres for import. The government would not treat them as used cars. Customs officials would also take care of the fact that the latest model cars must also be manufactured in the year of import in Pakistan.

When asked about the rationale of the decision, the official said that while importing some specialised vehicles from China used in cleaning roads and for carrying cars that had a mileage of 800-1500 kilometres, customs officials did not allow their import, arguing they fell under the category of used vehicles.

The official in the Ministry of Industries said that in China, such vehicles are manufactured in one corner of the country and shipped out from another corner. Such newly manufactured vehicles from their companies travel a distance of 800-1,500 kms to reach the port city from where they are shipped out for Pakistan.

“This issue resonated in the cabinet that decided to allow the government to import cars which have travelled 2,000 kilometres.”

The government, the official said, will consider them as new cars not used cars. However, the commercial import of used cars is still banned. Pakistan Muslim League-Nawaz (PMLN)-led Pakistan Democratic Movement (PDM) coalition government had imposed severe curbs on the import of cars to preserve the depleting forex reserves.

At the same time, the State Bank of Pakistan has also eased the regulations for advance payments of imports allowing authorised dealers to make full payments in advance without prior approval. The data issued by the Pakistan Automotive Manufacturers Association (PAMA) reported a 30 percent increase in car sales for January compared to the same period in 2023.

As per the PAMA, as many as 7,802 passenger cars were sold in January this year as opposed to 6,021 units last year. However, car sales were still down by 49 percent in the first seven months of the fiscal year with 38,464 units being sold compared to 74,933 during the same period in FY23.

In the second SRO 433(1) 2024, the government allowed export of flour manufactured from wheat imported solely for export under the Export Facilitation Scheme, 2021.

In this decision, the ECC had granted permission to export flour keeping in view increased demand of fine flour in different parts of the neighboring countries, including Afghanistan.

Pakistan has so far imported wheat worth $1.6 billion during the current fiscal year keeping in view the increased demand of wheat for domestic consumption. But the Ministry of Food and Agriculture presented a summary before the ECC for seeking export of flour, so the ECC granted the permission.

There is a need to review the domestic stocks of strategic reserves. It is expected that since the next wheat crop will be available in April in Sindh and during May/June in Punjab, there will not be any shortages.