Introduction

The Federal Government to issue SRO on ban of personal baggage car imports scheme marks a significant regulatory shift in Pakistan’s automotive and trade policy. The move signals tighter controls on used vehicle inflows that have long entered the country through the “personal baggage” channel. This article explains what the proposed SRO means, why the government is moving in this direction, how it differs from other import routes, and what the expected impact could be on prices, supply, dealers, and consumers across Pakistan—particularly in Islamabad and Rawalpindi, where demand for imported used cars has historically been strong.

What Is the Personal Baggage Car Import Scheme?

Under Pakistan’s import framework, used vehicles could be brought in via multiple routes, including:

• Transfer of Residence (TR)
• Gift Scheme
• Personal Baggage Scheme

The personal baggage route allowed overseas Pakistanis returning home to import a used car as part of their personal belongings, subject to certain age, engine capacity, and duty conditions. Over time, this channel expanded beyond genuine personal use and became a commonly used pathway for commercial importers to bring in used vehicles, particularly from Japan.

Why the Federal Government Is Moving Toward a Ban

The decision to issue an SRO reflects several policy and economic considerations.

1) Trade Deficit and Foreign Exchange Pressure

Used car imports add pressure on Pakistan’s foreign exchange reserves. While individual vehicles may seem minor, cumulative volumes through the personal baggage channel have been substantial. Restricting this route supports broader import management goals.

2) Market Distortion and Regulatory Loopholes

Authorities have repeatedly flagged misuse of the personal baggage scheme. Vehicles imported ostensibly for personal use often entered the resale market quickly, undermining the intent of the policy and creating uneven competition with locally assembled cars.

3) Support for Local Assembly

Pakistan’s auto policy increasingly prioritizes local manufacturing and assembly. A ban on the personal baggage route could reduce competition from imported used vehicles, particularly in popular segments such as 660cc and 1000cc hatchbacks.

4) Documentation and Compliance Challenges

Tracking genuine eligibility under the personal baggage scheme has proven difficult. A blanket restriction via SRO simplifies enforcement and reduces compliance ambiguity.

What an SRO Means in Practical Terms

A Statutory Regulatory Order (SRO) is a legal instrument that allows the federal government to amend or clarify rules under existing laws without parliamentary approval. Once issued and notified, the SRO becomes enforceable immediately or from a specified date.

For importers, this means:

• Customs authorities will stop processing used vehicle clearances under the personal baggage category.
• Pending cases may face transitional rules, depending on the final wording of the SRO.
• Importers will need to rely on remaining legal routes, such as TR or gift schemes, subject to eligibility.

How This Differs from Transfer of Residence and Gift Schemes

The proposed ban specifically targets personal baggage imports. Other routes may continue, though with strict enforcement.

Transfer of Residence (TR)

TR applies to individuals who have lived abroad for a defined period and are permanently relocating to Pakistan. Conditions typically include minimum overseas stay and restrictions on resale.

Gift Scheme

Under the gift route, a vehicle may be sent as a gift from an overseas Pakistani to a family member in Pakistan. This scheme also carries age limits and documentation requirements.

The government has historically kept these routes narrower, which is why the personal baggage scheme attracted higher volumes and scrutiny.

Expected Impact on Used Car Prices

Short-Term Effects

• Reduced Supply: A sudden halt in personal baggage imports will likely tighten supply, especially of Japanese used cars.
• Price Firming: Prices of existing imported stock may rise, particularly for fuel-efficient hybrids and compact cars.

Medium-Term Adjustment

• Shift Toward Local Models: Buyers may increasingly consider locally assembled alternatives.
• Stabilization: As the market adapts, price volatility could ease, depending on broader economic conditions and exchange rates.

Impact on Buyers in Islamabad and Rawalpindi

Islamabad and Rawalpindi have traditionally been strong markets for imported used vehicles due to:

• Higher purchasing power
• Preference for feature-rich Japanese imports
• Proximity to major dealers and import yards

A ban on the personal baggage route may:

• Narrow choices in the used import segment
• Push buyers toward certified used local cars or new locally assembled models
• Increase interest in short-term mobility options such as chauffeured travel for those delaying purchase decisions

For city-to-city movement or interim mobility needs, many residents opt for professional car services. In such cases, reliable providers like Al Farooq Rent a Car offer maintained vehicles with drivers for daily use, airport transfers, and intercity travel, allowing flexibility while the market adjusts.

Implications for Dealers and Importers

Importers

• Loss of a high-volume channel
• Inventory strategy shifts toward compliant routes or local partnerships
• Increased focus on documentation and eligibility verification

Dealers

• Potential inventory shortages in specific segments
• Greater emphasis on locally assembled vehicles
• More demand for transparent pricing and after-sales assurance

Government Policy Context

The proposed SRO aligns with broader measures to rationalize imports, encourage local industry, and improve regulatory clarity. Similar steps in recent years have targeted:

• Engine capacity caps
• Age limits on imported vehicles
• Tightened scrutiny of valuation and duty payments

For official notifications and regulatory updates, the government typically publishes details through the Federal Board of Revenue (FBR) and related authorities. Updates can be reviewed via official government portals, including the Federal Board of Revenue website (https://www.fbr.gov.pk).

What Consumers Should Do Next

• Monitor the SRO notification: Final details matter, especially regarding cut-off dates and transitional provisions.
• Verify eligibility: If considering TR or gift routes, ensure full compliance before initiating any process.
• Assess alternatives: Compare total ownership costs of imported used cars versus locally assembled options.
• Plan mobility needs: For short-term requirements—such as business travel or airport runs—temporary solutions may offer better value and flexibility.

FAQs

Is the personal baggage car import scheme completely banned?

The proposed SRO aims to ban used car imports under the personal baggage route. Final confirmation depends on the notified SRO text and its effective date.

Will Transfer of Residence imports still be allowed?

Based on current information, the ban targets only the personal baggage scheme. Transfer of Residence imports may continue under existing eligibility rules.

How will this affect used car prices in Pakistan?

Reduced supply of imported used cars could push prices upward in the short term, particularly in popular Japanese models.

Can overseas Pakistanis still send cars as gifts?

The gift scheme is a separate channel and may remain available, subject to compliance with age limits and documentation.

Are there alternatives if buyers delay purchasing a car?

Yes. Some buyers choose temporary mobility options, such as hiring a car with driver for daily or intercity travel, until the market stabilizes.

Disclaimer

The information provided in this article is based on publicly available reports and regulatory discussions at the time of writing. Final rules, timelines, and enforcement details will depend on the officially notified SRO and subsequent government clarifications. Readers are advised to consult official government notifications or professional advisors before making import or purchase decisions.