Proposed AIDP 2025-30: Ministerial differences delay new auto policy

Pakistan’s proposed Automobile & Auto Parts Manufacturing Policy (AIDP) 2025–30 has been delayed due to unresolved differences between the Ministries of Commerce and Industries over tariff structures. According to informed sources, a ministerial committee headed by the Power Minister is expected to seek guidance from the Prime Minister to break the deadlock.

 

Officials said the committee has held several meetings to reach a consensus on tariff proposals for the auto sector, but disagreements remain. One official noted that the government must decide whether to follow the National Tariff Policy (NTP) or the new AIDP, as both frameworks cannot operate simultaneously.

 

The Ministry of Industries and Production (MoI&P) has formally pointed out that customs duties on CKD kits, raw materials, subcomponents, and assemblies fall under the jurisdiction of the Tariff Policy Board (TPB). The ministry has urged the government to convene an urgent TPB meeting to establish an interim mechanism for determining duty structures until the new auto policy is finalized.

 

Progress has also been slowed by the absence of key officials. The Power Minister is currently in Saudi Arabia, while Commerce Secretary Jawad Paul is in Washington negotiating a trade agreement with the United States. As a result, no significant headway has been made on resolving tariff-related issues.

 

Another official said the government's position is that all New Energy Vehicles (NEVs) should be subject to a uniform tariff structure.

 

The delay has created additional uncertainty for Pakistan's goal of becoming a regional electric vehicle (EV) manufacturing hub. Finalization of both the AIDP 2025–30 and the National Electric Vehicle (NEV) Policy 2025–30 has been slower than expected, affecting the implementation of key reforms.

 

The NEV Policy aims to ensure that EVs account for 30% of new vehicle sales by 2030, reduce annual fuel imports by around two billion litres, expand charging infrastructure nationwide, and promote local manufacturing and exports. However, delays in regulatory approvals and implementation have slowed progress toward these objectives.

 

Industry stakeholders warn that uncertainty surrounding localization requirements, export commitments, tariff policies, and the broader regulatory framework is making investment planning difficult for both existing manufacturers and new entrants.

 

Further challenges have emerged due to delays in approving regulations for EV charging infrastructure. Draft rules prepared in 2024 remain pending because of coordination issues between the Engineering Development Board (EDB) and the National Energy Efficiency and Conservation Authority (NEECA), delaying the rollout of a nationwide charging network that is essential for large-scale EV adoption.

 

These policy delays come despite growing interest from local and international automakers. Chinese EV manufacturer BYD has announced plans to begin local production through a partnership in Pakistan, while Geely has also expressed interest in entering the market. Domestic companies, including Sazgar Engineering and Nishat Motors, have already expanded their hybrid and electric vehicle offerings in anticipation of supportive government policies.

 

Automotive analysts believe investors need greater regulatory certainty before committing substantial investments in manufacturing plants, battery assembly, advanced component localization, and charging infrastructure. They caution that continued delays could weaken the momentum created by the NEV Policy.

 

The policy also seeks to reduce carbon emissions by approximately 4.5 million tonnes annually, lower petroleum imports to save foreign exchange, and establish Pakistan as a competitive regional EV manufacturing hub. However, achieving these objectives will require stronger coordination among government institutions responsible for industrial policy, energy regulation, transportation, and taxation.

 

Industry representatives continue to stress the importance of finalizing EV charging regulations, arguing that a clear regulatory framework would boost investor confidence and accelerate infrastructure development. While some critics have questioned the EDB's pace in implementing the policy, board officials maintain that responsibility for EV infrastructure is shared among multiple institutions, including NEECA and other regulatory agencies.