ISLAMABAD - To end the monopoly of local car manufacturers, the government is all set to allow free import of all types of reconditioned cars, motorcycles, trucks and tractors in the forthcoming Trade Policy for the fiscal year 2011-12. In a rare development, the incumbent government, taking full advantage of current political situation in the country, is likely to allow free import under the Personal Baggage, Gift and Transfer of Residence Schemes Trade Policy 2011/12, sources revealed, adding, that Prime Minister Yousuf Raza Gilani will issue a special directive to remove the restrictions of Transfer of Residence (TR), Personal Baggage (PB) and Gift in the Trade Policy to be announced very soon. The Cabinet Division on July 21 sent a letter to the Ministry of Commerce seeking clarification on the import of vehicles under various schemes and asked the ministry to move a summary to the Cabinet for final approval, sources added. It was learnt that a key car manufacturer had personally summoned Pakistani diplomats to his office in Tokyo and expressed serious reservations over the proposed import plan while urging the Government of Pakistan to withdraw. The government is mustering its efforts to lessen the growing prices of locally manufactured cars. This action is being taken to help the common man to afford the car after numerous complaints of heavy increase in the prices of vehicles in the country, discussions with a ruling party member and officials of Ministry of Industries and Production left this impression. Official sources requesting not to be named while talking to this scribe shared that this rare development would break the monopoly of local manufacturers often found jacking up car prices on or another pretext and the decision would not put a negative impact on the domestic used car market but it would also help in dwindling the rates of new vehicles to be manufactured locally. They were of the view that the decision would not only generate revenue for the kitty but would also discourage the smuggling of cars, especially in Balochistan and Khyber Pakhtunkhwa but it would upset parts vendors and car makers. Market sources argued that the mighty auto assemblers have increased prices irrationally to exceptionally high levels, beyond the affordability of average consumer. Despite public demands from all quarters the prices of cars were not reduced. They said the monopolistic behavior of car assemblers and restriction on the import of used cars had deprived local consumers of their right to have cheap sources of transportation. However, the government should decrease the import duty after this landmark decision if materialized. It is to be noted here that despite around 25 years in operation the local assemblers have failed to introduce high-tech production in the country and still relying on the import of complicated parts. They were supposed to achieve localization in the industry by making or purchasing parts from the local market under deletion program but failed in doing do. The assemblers are still buying vehicles in Complete Knock Down (CKD) form from at least six countries, even from India via Dubai. This decision would further help in rationalizing the prices of locally manufactured cars, a source opined, adding that although these schemes were meant for overseas Pakistanis the commercial importers would jump in to import cars on bulk basis, while using passport details of overseas Pakistanis. However, it would be difficult to make sure that overseas Pakistanis, especially the labour class, to stop selling their documents to commercial importers for availing these facilities in duty reduction, sources said. It is relevant to mention here that as per existing rules, in order to be eligible for importing a used car under the personal baggage scheme, a minimum stay abroad of six months within the last seven months is required. In order to gift a vehicle to relatives, the requirement is at least two years of stay abroad during the preceding three years. Moreover, a vehicle may be gifted only to a family member residing in Pakistan. Under the special regime, taxes are levied on the basis of engine capacity, irrespective of the vehicles value and optional/additional accessories. The Federal Cabinet meeting chaired by Prime Minister Yousuf Raza Gilani in recent past had to allow the import of five years old used vehicles in the country. The cabinet took this action after complaints of extraordinary increase in the prices of vehicles. This action will help the common man of Pakistan to afford the car. It is also worth mentioning that a total of 72,000 used cars and other vehicles imported under transfer of residence, personal baggage and gift schemes had arrived in 2005-06. In 2006-07, the age limit was reduced to five years and imports fell to 42,000 units. In 2007-08, the age limit was further slashed to three years. In 2008-09, the government had imposed 50 per cent regulatory duty followed by 12.5 per cent increase in customs duty and cut in depreciation to one per cent from two per cent.