Latest news with #Jam Kamal Khan
Arab News
4 days ago
- Automotive
- Arab News
Pakistan to cut auto tariffs over 5 years, eyes car exports after tractors and motorcycles
ISLAMABAD: Pakistan will gradually cut tariffs on the auto sector over the next five years and work on a strategy to expand exports, Commerce Minister Jam Kamal Khan told industry representatives on Wednesday, as the government seeks to strengthen the local market and boost overseas sales. Khan met auto industry stakeholders in Islamabad and announced the formation of a committee, comprising officials from the Commerce Ministry, the Federal Board of Revenue and the Ministry of Industries, to address sector challenges. The minister invited the industry to participate in the upcoming industrial policy and said healthy competition was increasing in Pakistan's auto market. 'After tractors and motorcycles, we will now also export cars,' Khan said, adding that the government would prepare 'a strategy for the development and exports of the auto sector' and that tariffs 'will be gradually reduced over the next five years.' Khan said imported used cars should meet quality and environment-friendly standards and linked new export prospects to a recently signed US tariff reduction agreement. Under the deal, Washington has cut import duties on Pakistani goods to 19 percent, a move the government says will improve competitiveness for products including automobiles. 'The tariff reduction agreement with the US has created new opportunities for auto exports,' the minister said. Industry representatives told the meeting that new technologies had increased production costs, and urged protection for local manufacturers from the import of used vehicles. Pakistan's automobile industry is one of the fastest-growing sectors, contributing around 7 percent of Large Scale Manufacturing (LSM) and accounting for 7–16 percent of the manufacturing GDP depending on the metric used. It employs millions, and local assembly is dominated by established players like Honda, Toyota, Suzuki, Hyundai, Kia, and newcomers such as MG and Haval. The market includes motorcycles, tractors, cars, and commercial vehicles, but remains highly concentrated among a few brands. The fiscal year 2025–26 budget introduced several changes impacting the auto industry. A new Green Tax was applied to internal combustion engine vehicles, ranging from 1 percent to 3 percent of vehicle value depending on engine size and origin . The industry also flagged an imbalance in GST rates — 8.5 percent on hybrid electric vehicles versus 18 percent on fully electric vehicles — raising concerns over a policy disconnect with the Automotive Industry Development and Export Policy (AIDEP) 2021–2026 provisions. Experts warn that high taxes, policy uncertainty, and weak industrial support were curbing demand. Recent vehicle sales dropped 49 percent month-on‑month in July 2025, partly due to pre-budget rushes and subsequent tax adjustments . The sector also faces structural challenges including limited localization of parts, high production costs, and fragile capacity utilization (around 24 percent). Policy instability, particularly regarding tariff reductions and fiscal incentives, risks discouraging investment, and experts say long-term industrial support is necessary to prevent local manufacturing decline. Inflation, currency volatility, and macroeconomic uncertainty further weigh on consumer demand and financing.
Arab News
13-07-2025
- Business
- Arab News
Pakistani commerce minister embarks on ‘pivotal' UK visit to deepen economic ties
ISLAMABAD: Pakistani Commerce Minister Jam Kamal Khan has embarked on a 'pivotal' official visit to the United Kingdom (UK) from July 14 till July 20 to strengthen economic ties between the two countries, Khan's ministry said on Sunday. The minister is accompanied by Commerce Secretary Jawad Paul and this high-level visit aims to deepen bilateral commercial ties, strengthen institutional frameworks, and open new avenues for trade and investment between Pakistan and the UK. Khan will engage with major Chambers of Commerce in London and Birmingham to advance bilateral trade and explore opportunities in emerging sectors, besides highlighting Pakistan's export potential and fostering greater business-to-business collaboration. 'One of the central moments of the visit will be the signing of the Terms of Reference (ToRs) for the Pakistan-UK Trade Dialogue,' the commerce ministry said. 'This formalization marks a significant step toward institutionalizing bilateral trade cooperation, injecting greater standardization, transparency, and predictability into the economic relationship between the two countries.' The UK maintains zero-tariff access of Pakistan's exports post-Brexit, making it Pakistan's largest European and third-largest individual export partner, according to the Pakistani foreign ministry. The Pakistan-UK trade in goods and services reached £4.7 billion in 2024, an increase of 7.3 percent, or £320 million, compared to the previous year, according to the UK government data. Of this £4.7 billion, UK exports to Pakistan amounted to £2.2 billion, while its imports from Pakistan amounted to £2.5 billion. During his visit, the Pakistani commerce minister is scheduled to meet with members of the UK's All Parties Parliamentary Group (APPG), where he will advocate for stronger political support in enhancing trade and investment flows, according to the commerce ministry. These discussions will aim to align parliamentary efforts with Pakistan's broader economic diplomacy goals and strengthen long-term partnerships. 'Khan will interact with leading UK-based multi-million-dollar companies from key sectors such as food processing, information technology, engineering, fintech, and capital investment. These meetings aim to showcase Pakistan's economic potential and attract targeted investments into high-growth industries,' the commerce ministry said. 'The visit also includes important meetings with the UK Pakistan Business Council, Pakistan Britain Business Council, and UK Pakistan Chamber of Commerce & Industry. These discussions will focus on strengthening institutional trade linkages and leveraging diaspora-led initiatives to boost trade volumes and visibility in the UK market.' Pakistan is currently striving to draw overseas investment amid a gradually healing macroeconomic environment after a prolonged downturn that forced Islamabad to seek external financing from friendly nations and multiple loan programs from the International Monetary Fund (IMF). Khan's visit follows another trip to the UK in June by Pakistan's Finance Minister Muhammad Aurangzeb and Prime Minister Shehbaz Sharif's aide on privatization, Muhammad Ali, who held meetings with executives from renowned firms, including TTB Partners, STJ Partners, Deutsche Bank, Berenberg Bank, and Amundi Fund Group, to spotlight Pakistan's privatization roadmap and its growing potential as a hub for strategic, long-term investment. The Pakistani commerce ministry said Khan's visit marks a 'renewed thrust in Pakistan's efforts to advance economic diplomacy, diversify export markets, and solidify its commercial footprint in global markets like the United Kingdom.'
