Pakistan, IMF talks on new auto policy remain 'inconclusive'

ISLAMABAD: Talks between the Pakistan government and the International Monetary Fund (IMF) on the new auto policy remained inconclusive, ARY News reported on Friday, citing sources.

The Pakistan-IMF talks cover a review of Islamabad’s 37-month, $7 billion Extended Fund Facility (EFF), approved in Sept. 2024, and a separate review of a $1.4 billion Resilience and Sustainability Facility (RSF). A successful review of the EFF could unlock about $1 billion for Pakistan, while the RSF review could release around $200 million, bringing the combined potential disbursement to roughly $1.2 billion.



The IMF has raised objections to certain provisions of the proposed auto policy, sources said. The government will brief the Economic Coordination Committee (ECC) and the federal cabinet on the IMF’s concerns.

Following consultations, some changes will be made to the draft auto policy, sources said. The draft will subsequently be finalized in consultation with local automobile manufacturers, importers, and the IMF.

The government has also briefed the IMF on proposals aimed at reducing vehicle prices.

The proposed auto policy includes special incentives and significant tax reductions for electric vehicles (EVs). According to the draft document, promoting electric vehicles has been made a key objective of the new Auto Policy 2026–2031.

Read more: IMF ‘calls’ on Pakistan to accelerate energy sector reforms

Under the proposal, customs duties on conventional vehicles would be reduced by up to 80% over the next five years. The document also states that taxes will be reduced annually from 2026 under the new National Tariff Policy.

The proposed Auto Policy 2026–2031 also includes a special package to promote electric vehicles.

The draft proposes giving equal status to battery electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs), and range-extended electric vehicles (REEVs), according to the document.