IMF Structural Benchmark : NA panel passes auto industry Bill 2025 amid fierce opposition

ISLAMABAD: The National Assembly Standing Committee on Industries and Production on Tuesday approved the Motor Vehicles Industry Development Bill, 2025, with the casting vote of the Committee Chairman, following a tie during voting.
Chaired by Syed Hafeezuddin, the Committee did not deliberate on the pros and cons of the Bill, which is considered an IMF’s Structural Benchmark. Members from the Pakistan Peoples’ Party (PPP) opposed the Bill and recommended deferring it until the next Committee meeting. However, members from the Pakistan Muslim League-Nawaz (PML-N) insisted on approving the Bill during the current session.
PPP members argued that the proposed legislation infringes on provincial autonomy, noting that the power to inspect vehicles is already vested in the provinces.
The legislation targets vehicles to be manufactured, assembled, or imported in the future, and does not apply to existing vehicles.
Special Assistant to the Prime Minister (SAPM) on Industries and Production Haroon Akhtar Khan, along with Secretary Industries and Production Saif Anjum, presented key features of the Bill. They argued that it is necessary to establish safety and quality standards for both imported (used and new) and locally manufactured vehicles.
Mr. Haroon stated that while the auto industry generally supports the introduction of safety standards, there are concerns that such regulations could increase production costs.
The Secretary of Industries added that the government is planning to allow the commercial import of used cars up to five years old and that, with the passage of this legislation, the age limit may be eliminated. He warned that without proper standards, Pakistan risks becoming a dumping ground for substandard vehicles.
A representative from the Law Division suggested a clause-by-clause reading of the Bill, but the proposal was sidelined as heated exchanges broke out between Committee members from both sides.
Initially, the Chairman of the Committee and the SAPM agreed to defer the Bill until the following Friday. However, PPP member Naz Baloch briefly left the meeting to consult with party leadership and returned to announce the PPP’s decision to oppose the Bill. As a result, a vote was conducted.
Four members from the PPP opposed the Bill, while four from the PML-N supported it. With the vote tied, the Chairman cast the deciding vote in favor of the Bill’s approval.
Meanwhile, the Pakistan Automotive Manufacturers Association (PAMA) has voiced serious concerns over the proposed legislation, warning that it could hurt legitimate businesses while leaving the unregulated sector unchecked.
In a letter addressed to the Federal Secretary of the Ministry of Industries, PAMA Director General Abdul Waheed Khan said the association was not consulted during the drafting of the Act. He expressed alarm over proposed provisions that criminalize certain industrial activities and assign oversight to the Federal Investigation Agency (FIA).
Khan said that during a September 5 meeting chaired by the Additional Secretary, the association was allowed to submit written comments before the Committee meeting on September 9.
“The industry is deeply concerned,” he said. “This legislation appears to criminalize manufacturing and trade without sufficient justification. Involving the FIA in such matters is especially troubling.”
He added that the Bill fails to improve consumer protection beyond what is already covered under the Auto Industry Development and Export Policy (AIDEP) 2021–26.
Khan further criticized the broad powers granted to the Engineering Development Board (EDB), which he said could interfere with mandates already overseen by other ministries, including Science and Technology, Climate Change, and the Federal Board of Revenue (FBR).
“The industry is shocked,” he stated. “What violations have occurred that warrant the criminalisation of manufacturing and trade? Treating industrialists like career criminals by enforcing these provisions through the FIA is unacceptable.”
He also noted that the Bill focuses narrowly on vehicle safety, neglecting broader issues such as road infrastructure, road safety legislation, and public adherence to traffic rules. This, he argued, results in unjust penalties and imprisonment, with fines directed into the EDB fund.
Khan concluded that the proposed law neither promotes industry development nor enhances consumer protection. “There appears to have been no consultation with provincial authorities. The imposition of excessive controls threatens manufacturing operations and discourages both current and future investments in the automotive sector,” he said.
PAMA has called on the Ministry of Industries to halt the legislation and subject it to a thorough review, particularly regarding the provisions on criminal liability for auto manufacturers.
ENDS