ISLAMABAD: Under the newly drafted Auto Policy for 2026-31, the government has proposed introduction of import-refurbishment-export (IRE) of used cars from Pakistan on the pattern of the Dubai/Jebel Ali model in order to enhance exports.
In the aftermath of the Gulf war, this proposal has been pushed hard by the Special Investment Facilitation Council (SIFC) as it can become a good business in the country.
Pakistan is eyeing multi-million-dollar exports with the help of this proposed mechanism at a time when the country’s exports are struggling to achieve the desired target. The auto policy is currently in negotiation with the International Monetary Fund (IMF), and then it will be tabled before the federal cabinet.
The auto policy has proposed establishment of import refurbishment export of used vehicles in order to give impetus to boost up exports. It will replicate the international practice on the pattern of Dubai/Jebel Ali. It provides duty suspension incentives under Export Facilitation Scheme (EFS).
Top official sources confirmed to The News on Tuesday that the IRE scheme is designed to create a licensed industry for importing used vehicles, refurbishing domestically and then exporting the refurbished vehicles from Pakistan to different destinations of the world. By leveraging duty suspension and export facilitation, the policy seeks to stimulate investment in specialised refurbishment facilities, generate export revenues and integrate Pakistan into global automotive value chain. Eligibility and procedures are defined for any qualified operator (sectoral basis, not a single pilot) under the Export Facilitation Scheme (EFS) and Import Policy Order (IPO) 2022, hence the Federal Board of Revenue (FBR) may amend relevant regime to facilitate the same. These vehicles will not be allowed to be sold in local market.
According to the sources, only duly registered companies may operate in the IRE sector. Operators must be incorporated under the Companies Act and have sufficient financial and technical capacity, including a demonstrated business plan for refurbishment and export.
In addition, the IRE firms must obtain specific approval from the Ministry of Commerce/Industries (as a sectoral export project) and register under the EFS for the IRE sector.
They must also demonstrate that their facility has the required refurbishment infrastructure as verified by the Engineering Development Board (EDB).
Vehicles imported under the IRE framework must be re-exported within a specified time frame of up to nine months. Accordingly, each vehicle (or batch) must exit Pakistan no later than nine months from the date of import. In exceptional circumstances, limited extensions may be granted, subject to valid justification and additional financial security. Failure to re-export within the prescribed period will result in violation of this policy and the FBR may take appropriate action according to its rules and regulations.
