KARACHI: An aide to Prime Minister Shehbaz Sharif has urged Pakistan’s automotive industry to prepare for a faster transition to electric vehicles and to make local manufacturing globally competitive, the commerce ministry said on Monday, as the government works to finalize a new auto policy for the sector.

Pakistani officials have been holding consultations with stakeholders on the Automobiles and Auto Parts Manufacturing Policy 2026-31, which aims to move Pakistan’s largely assembly-focused industry toward local manufacturing and exports and open it to greater competition.

Speaking at a symposium held during the Pakistan International Auto Show 2026 in Lahore, Rana Ihsan Afzal Khan underscored the need for competitive localization, technological advancement and a faster transition towards electric mobility to secure the future of Pakistan’s automotive industry.

“The future of Pakistan’s automotive industry lies in competitive localization, innovation and electric mobility. The government remains committed to creating an enabling environment in which industry can grow, invest and compete internationally,” Khan was quoted as saying by the commerce ministry.

The draft policy is being aligned with the National Tariff Policy 2025-30, which envisages gradually lowering tariffs on industrial inputs. Parts manufacturers have raised concerns that the proposed tariff changes, especially for new energy vehicles, could undermine localization by making imported parts more attractive than those already made in Pakistan.

Khan said the automotive sector contributes nearly four percent of Pakistan’s gross domestic product and employs millions of people, with every vehicle produced in the country supporting a value chain of manufacturers, vendors, engineers, technicians and workers.

A committee chaired by Law Minister Azam Nazeer Tarar reviewed those concerns clause by clause last week and agreed that consultations would continue. The draft is expected to be shared with the International Monetary Fund (IMF) before it goes to the federal cabinet for approval.

Addressing industry leaders, government officials and academics at the symposium, Khan said localization must go beyond domestic production and be aligned with global competitiveness, affordability, quality and reliability.

"The time had come for the sector to prepare decisively for emerging technologies, particularly electric vehicles," he said.

Khan said the government would work with industry stakeholders to develop policies that were inclusive, future-oriented, consistent and fair.

The industry has welcomed the government’s ambitions but questioned whether they will be matched by support.

Speaking to Arab News last week, Razi-ur-Rahman, director general of the Pakistan Automotive Manufacturers Association, said that raising automotive exports was a good goal but “cannot be done by desire alone.”

“It depends on how the government will support this initiative,” he said.