ECC approves 11% customs duty on 13 more auto parts to protect local makers
The government has levied an 11 per cent auto parts duty on 13 additional items to protect local auto parts manufacturers, extending a localisation drive that already covers more than 1,200 tariff lines.
Auto parts duty: what the ECC approved
The Economic Coordination Committee of the cabinet approved the proposal at a recent meeting. The Revenue Division proposed updating SRO 693(I)/2006, dated July 1, 2006, which lists auto parts and components that have been localised, meaning they are now manufactured in Pakistan.
The 13 new items include radial and other tyres for heavy commercial vehicles, licence plates, bracket-side reflectors, side reflectors, right and left side plates, front decorative components, foot rests and their plates, wheel assemblies and parts, windscreens and parts, seat bases, tail boxes and parts, centre covers and parts, and plates and parts.
The Revenue Division briefed the ECC that additional customs duty under sub-section (5) of Section 18 of the Customs Act, 1969, as determined by the Engineering Development Board and the Ministry of Industries and Production, was required to discourage imports of parts now made locally.
The Ministry of Industries had shared its recommendations in a letter dated September 7, 2026. A draft summary was circulated to the Ministry of Finance and the Ministry of Commerce before the ECC approved the proposal titled “Amendment in SRO 693 for Levy of Additional Customs Duty on Additional Items”.
How the localisation list works
At present, more than 1,200 Pakistan Customs Tariff codes for auto parts and components fall under SRO 693(I)/2006, with additional customs duty charged at different rates set by the Engineering Development Board. The SRO is updated from time to time on the Ministry of Industries’ recommendations.
The policy logic is straightforward: pushing local manufacturing of auto parts is expected to conserve foreign exchange, create jobs and, in the long run, open export avenues for Pakistani vendors.
Why it matters as new carmakers enter Pakistan
The duty push comes as Pakistan’s auto market sees fresh activity. New electric vehicle brands are entering the market, including Nora and Metro, which recently targeted city commuters with two new models, as we reported in our piece on Nora and Metro electric vehicles in Pakistan.
Localisation rules will shape how these and other assemblers source components. Higher duties on imported parts that local firms can already make give domestic vendors a price edge, but assemblers will watch how the Engineering Development Board treats parts used in newer electric models, where local supply chains are still thin.
For buyers, the near-term effect may be limited, since the duty applies to specific parts rather than complete vehicles. Over time, though, a deeper local supply base can hold down maintenance costs and spare-part prices, which matter to Pakistani car owners dealing with rising fuel costs under the daily price mechanism.
FAQ
Which auto parts face the new 11% customs duty?
Thirteen items, including heavy-vehicle tyres, licence plates, reflectors, side plates, foot rests, wheel assemblies, windscreens, seat bases, tail boxes and centre covers.
Why is Pakistan raising auto parts customs duty?
To discourage imports of parts now manufactured locally, protecting domestic parts makers and encouraging further localisation of the auto supply chain.
What is SRO 693(I)/2006?
It is the statutory order listing localised auto parts and components on which additional customs duty is levied, updated periodically on the Ministry of Industries’ recommendations.
