Latest news with #AIDEP
Business Recorder
17 hours ago
- Automotive
- Business Recorder
National Electric Vehicle Policy 2025–30 launched
ISLAMABAD: The government has officially launched the National Electric Vehicle (NEV) Policy 2025–30, aiming to reduce carbon emissions, cut fuel imports, and promote local manufacturing of electric vehicles (EVs). Speaking at the launch, Prime Minister's Special Assistant on Industries Haroon Akhtar Khan said the policy will not only strengthen Pakistan's economy but also protect the country from the harsh effects of climate change. He called the policy a historic step toward clean, affordable, and sustainable transportation. He said that over the next five years, the government will provide a total Rs100 billion subsidy to the electric vehicles. One of the major goals of the policy is to ensure that 30 percent of new vehicles by 2030 are electric. This shift is expected to save 2.07 billion litres of fuel annually, which translates to roughly $1 billion in foreign exchange. Additionally, it could reduce carbon emissions by 4.5 million tons and cut health-related expenses by $405 million each year. To promote adoption, the government has allocated Rs9 billion in subsidies for the fiscal year 2025–26. This funding will help deliver over 116,000 electric bikes and more than 3,000 electric rickshaws. Notably, 25 per cent of the subsidy is reserved for women to support affordable and eco-friendly mobility options for them. To further localise EV production, the government has offered tax breaks on EV parts and extended incentives under the AIDEP tariff facility until 2026. Haroon Akhtar Khan emphasised that this policy could save Pakistan up to Rs800 billion over the next five years and urged all stakeholders to join hands in making this clean transportation vision a reality. Khan stated that the new EV policy is aligned with the prime minister's vision of promoting clean, sustainable, and affordable transportation while encouraging local industry and protecting the environment. He emphasised that the transport sector is a major contributor to carbon emissions in Pakistan, and reform in this area is imperative. He said a fully digital platform has also been introduced to ensure transparent online application, verification, and disbursement of subsidies. Furthermore, the policy outlines the installation of 40 new EV charging stations on motorways, with an average distance of 105 kilometres between them. The policy also includes the introduction of battery swapping systems, vehicle-to-grid (V2G) schemes, and mandatory integration of EV charging points in new building codes to facilitate wider adoption in urban areas. To encourage local manufacturing, incentives are being provided to domestic producers. Currently, over 90 percent of parts for two- and three-wheelers are already manufactured locally. The government will also introduce special support packages for small and medium enterprises (SMEs) to further boost localisation. The AIDEP tariff facility will continue until 2026 and be phased out gradually by 2030. The special assistant noted that the policy was developed through consultations with over 60 experts, institutions, and industry stakeholders, guided by a steering committee under the Ministry of Industries and Production since September 2024. The steering committee held monthly and quarterly review meetings, while the Auditor General of Pakistan will conduct a performance audit every six months. He stressed that the NEV Policy 2025–30 is not only an environmental revolution but also a foundation for industrial growth, local employment, energy efficiency, and technological self-reliance in Pakistan. He expressed hope that federal and provincial governments, the private sector, and citizens will work together to realise this vision of a clean, modern, and sustainable transport system. SAPM stated that the policy is a decisive move toward clean energy, sustainable transportation, and industrial development. It presents a comprehensive and results-driven strategy that aims to lead Pakistan toward a cleaner and more resilient future. He also highlighted that locally produced goods are 30–40 percent cheaper than imported alternatives. In the two-wheeler segment alone, more than 90 percent of parts are now produced locally. Given Pakistan's vulnerability to climate change, the EV policy will significantly contribute to achieving global carbon reduction targets. The policy is expected to yield savings of approximately Rs800 billion over the next five years through reduced fuel imports, the use of cheap electricity and revenue from carbon credits. Charging vehicles with electricity will also reduce capacity payments from Rs174 billion to Rs105 billion, and carbon credits could generate around Rs15 billion in revenue. The country's total energy demand for EVs over the next five years is projected at 126 terawatt-hours, which can be met using the existing surplus in the national grid. An electric rickshaw or bike user is expected to recover their initial investment within one year and 10 months due to the low cost of charging compared to petrol. For instance, if the additional cost of an electric bike is Rs150,000, this can be recouped within less than two years through fuel savings. He concluded by saying that the government has also provided exemptions on customs duties and sales tax on EV parts to support the local industry. 'This policy should be embraced wholeheartedly by Pakistan, as it is a game-changer for our economy, environment, and industrial landscape,' Akhtar affirmed. Copyright Business Recorder, 2025
Business Recorder
a day ago
- Automotive
- Business Recorder
Govt launches National Electric Vehicle Policy 2025-30
The federal government has officially launched the National Electric Vehicle (NEV) Policy 2025-30, the Ministry of Industries and Production said on Thursday. Speaking at the launch, Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan called the policy a 'historic and transformative step' in Pakistan's journey towards industrial, environmental, and energy reforms. Haroon Akhtar Khan stated that the new EV policy is aligned with the Prime Minister's vision of promoting clean, sustainable, and affordable transportation while encouraging local industry and protecting the environment. He emphasised that the transport sector is a major contributor to carbon emissions in Pakistan, and reform in this area is imperative. National Electric Vehicle policy expected in one month He said that one of the major targets under the policy is to ensure that 30% of all new vehicles sold in Pakistan by 2030 are electric. This transition is projected to save 2.07 billion litres of fuel annually, amounting to nearly USD 1 billion in foreign exchange savings. Additionally, the policy is expected to reduce carbon emissions by 4.5 million tons and cut healthcare-related costs by USD 405 million per year. Akhtar announced that an initial subsidy of Rs. 9 billion has been allocated for the fiscal year 2025-26, under which 116,053 electric bikes and 3,171 electric rickshaws will be facilitated. Importantly, 25% of this subsidy is reserved for women to provide them with safe, affordable, and eco-friendly mobility. He said a fully digital platform has also been introduced to ensure transparent online application, verification, and disbursement of subsidies. Furthermore, the policy outlines the installation of 40 new EV charging stations on motorways, with an average distance of 105 kilometres between them. Electric Vehicle policy to be announced by end of November: Tanveer The policy also includes the introduction of battery swapping systems, vehicle-to-grid (V2G) schemes, and mandatory integration of EV charging points in new building codes to facilitate wider adoption in urban areas. To encourage local manufacturing, incentives are being provided to domestic producers. Currently, over 90% of parts for two- and three-wheelers are already manufactured locally. The government will also introduce special support packages for small and medium enterprises (SMEs) to further boost localisation. The AIDEP tariff facility will continue until 2026 and be phased out gradually by 2030. The Special Assistant noted that the policy was developed through consultations with over 60 experts, institutions, and industry stakeholders, guided by a steering committee under the Ministry of Industries and Production since September 2024. The steering committee will hold monthly and quarterly review meetings, while the Auditor General of Pakistan will conduct a performance audit every six months. He stressed that the NEV Policy 2025-30 is not only an environmental revolution but also a foundation for industrial growth, local employment, energy efficiency, and technological self-reliance in Pakistan. He expressed hope that federal and provincial governments, the private sector, and citizens will work together to realise this vision of a clean, modern, and sustainable transport system. Akhtar stated that the policy is a decisive move toward clean energy, sustainable transportation, and industrial development. It presents a comprehensive and results-driven strategy that aims to lead Pakistan toward a cleaner and more resilient future. He also highlighted that locally produced goods are 30-40% cheaper than imported alternatives. In the two-wheeler segment alone, more than 90% of parts are now produced locally. Given Pakistan's vulnerability to climate change, the EV policy will significantly contribute to achieving global carbon reduction targets. The policy is expected to yield savings of approximately Rs. 800 billion over the next 24-25 years through reduced fuel imports, the use of cheap electricity, and revenue from carbon credits. Charging vehicles with electricity will also reduce capacity payments from Rs174 billion to Rs105 billion, and carbon credits could generate around Rs15 billion in revenue. The country's total energy demand for EVs over the next five years is projected at 126 terawatt-hours, which can be met using the existing surplus in the national grid. An electric rickshaw or bike user is expected to recover their initial investment within 1 year and 10 months due to the low cost of charging compared to petrol. For instance, if the additional cost of an electric bike is Rs. 150,000, this can be recouped within less than two years through fuel savings. He concluded by saying that the government has also provided exemptions on customs duties and sales tax on EV parts to support the local industry. 'This policy should be embraced wholeheartedly by Pakistan, as it is a game-changer for our economy, environment, and industrial landscape,' Akhtar affirmed.
Express Tribune
22-03-2025
- Business
- Express Tribune
Pakistan, IMF agree on tariff cuts
Listen to article Pakistan and the International Monetary Fund (IMF) have made further adjustments to the economic liberalisation plan and agreed to cut weighted average applied tariffs to around 6% — a reduction of 43% over five years in the protection level available to local industries. The country has the third-highest trade-weighted average tariffs in South Asia at 10.6%, and after the implementation of the full liberalisation plan, it will have the lowest weighted average tariffs in the region. The final adjustments were made during a virtual meeting held on Thursday, according to government sources. It has been agreed that the weighted average applied tariffs will be reduced from the current 10.6% to just around 6% over five years, starting in July this year, they added. This 43% reduction in tariffs will completely open the economy to foreign competition. But the reduction will be achieved under two different policies. Under the new National Tariff Policy, the weighted average tariffs will be reduced to 7.4% by 2030. To cut these further to around 6%, the government will lower tariff protection available to the automobile sector through the Auto Industry Development and Export Policy (AIDEP) 2026-30 from July next year, according to the sources. The Ministry of Commerce deals with the National Tariff Policy, while the Ministry of Industries is responsible for the AIDEP Policy. They added that excluding the tariff reduction plan for the automobile sector, the weighted average applied tariffs will now be 7.4% compared to the earlier understanding of 7.1%. The difference between the 7.4% and the earlier agreed 7.1% was due to the status of the import tariffs for Customs Chapter 27, which deals with the duty structure of imported energy products. The government has agreed to completely abolish additional customs duties, cut regulatory duties by 80%, and withdraw concessions under the fifth schedule of the Customs Act, according to sources. The IMF had long been raising concerns over the protection available to local industries, but Pakistani authorities were reluctant to open these areas. Pakistan's agreement with the IMF on trade liberalisation comes at a time when the world is closing its borders to foreign companies. The plan states that the 7% additional customs duty on specific goods will be abolished from July this year. Likewise, the 2% additional customs duty on the zero-tariff slab will also be abolished in July. The 2% duty on the 3% tariff slab will be cut to 1% in the next fiscal year and to nil from the year 2027. The 4% additional customs duty on the 16% tariff slab will remain unchanged for the next fiscal year but will be reduced to 3% the following year and completely abolished in 2030. The 6% additional customs duty on the 20% tariff slab will be reduced starting in 2026-27 and abolished in 2030. Sources said that the IMF demanded the government reduce the weighted average tariffs to around 5%, but the authorities committed to cutting it to around 6%. Pakistan has assured the IMF that it will seek approval of the new tariff policy from the federal cabinet before the end of June. The tariff reduction will be implemented in the fiscal year 2025-26 budget, to be presented in Parliament in June. Pakistan has also assured the IMF that in the future, it will not introduce any new regulatory duties except where essential, and a sunset clause will be introduced for their elimination. Pakistan has committed to addressing vehicle affordability by setting out a path to reduce protection by 2030, including eliminating all additional customs duties and regulatory duties in the auto sector and rationalising customs duties with the highest slab of 20%. When added to the duty reductions envisaged under the new tariff policy, this will bring the weighted average tariff to 6% by 2030, according to the understanding reached on Thursday. The maximum duty on all imports in the auto sector will be 20% by 2030, sources said. In the case of regulatory duty, duties currently ranging from 55% to 90% will be cut to 48.5% and 80% in the first year and will be brought down to 26.5% to 44% in the last year. Regulatory duty currently falling in the range of 45-50% will also be cut by up to 10% in July. Goods carrying relatively lower duties will see a smaller reduction in the first year. According to the plan, a new 6% customs slab will be introduced. The 11% customs duty slab rate will be reduced to 9% within two years. The 16% customs duty slab rate will be cut to 12% in three years. There will be no change in the 20% duty slab. Detailed discussions were also held with the IMF on Chapter 27 in Pakistan's Customs Tariff, which covers mineral fuels, mineral oils and products of their distillation, bituminous substances, mineral waxes, and petroleum products. IMF officials were of the view that the government was using import tariffs to adjust petroleum product prices. However, the government makes these adjustments through the petroleum levy. Commerce ministry officials argued that the IMF should view Chapter 27 imports in the context of volatility in the energy market. Authorities believe that trade liberalisation could push exports to $47 billion by 2030 and that the economy could grow by 4.6%. Imports are projected to increase to $84 billion under the liberalisation plan.
