Pakistan proposes major cut in import duties on motorcycle parts under Auto Policy 2026-31

ISLAMABAD: Pakistan’s proposed Auto Policy 2026-31 includes significant reductions in customs duties on imported motorcycle parts, aiming to lower production costs and improve the competitiveness of the local automotive industry.
According to details reported on October 20, 2026, the draft policy recommends reducing import duties on assembly parts for motorcycles, motorcycle rickshaws and mopeds.
Under the proposal, customs duty on non-localised completely knocked-down (CKD) parts would be reduced from 15% to 5%. The draft also proposes gradually lowering duties on parts in the localised category from a reference rate of 46% to 15% by the fiscal year 2030-31.
Proposed Customs Duty Rates on Motorcycle Parts
Financial Year Non-localised Parts Localised-category Parts
FY2025-26 (Reference) 15% 46%
FY2026-27 5% 30%
FY2027-28 5% 30%
FY2028-29 5% 25%
FY2029-30 5% 25%
FY2030-31 5% 15%
Lower Production Costs Expected
The proposed measures could help motorcycle manufacturers obtain imported components at lower costs, potentially reducing their overall production expenses. However, it remains unclear whether any savings would be passed on to consumers through lower motorcycle prices.

Impact on Local Parts Manufacturers
The proposed reduction in import duties could increase competition for domestic parts manufacturers. Maintaining a balance between reducing production costs and protecting local suppliers is expected to be an important consideration during the policy’s implementation.

Policy Yet to Receive Final Approval
The Auto Policy 2026-31 proposals have not yet been finalised or implemented. Their implementation remains subject to government approval and the issuance of relevant customs notifications. Consumers should therefore not expect an immediate reduction in motorcycle prices or spare-parts costs until the proposed changes are formally approved and implemented.