Govt approves UAE-style vehicle refurbishment, re-export framework

The Economic Coordination Committee (ECC) has approved a framework for the import, refurbishment, and re-export of used vehicles and auto parts, a move that could unlock investment of up to $300 million.

According to officials privy to the matter, the initiative, which had remained stalled since October 2023 due to regulatory misalignment among multiple government bodies, including the Ministry of Commerce, Ministry of Industries and Production, Federal Board of Revenue and Engineering Development Board (EDB), received approval from the ECC on April 27, 2026, after facilitation by the Special Investment Facilitation Council (SIFC).

“SIFC undertook intensive facilitation during Q1 2026, aligning IPO 2022 and EFS 2021 frameworks to structure Pakistan’s first Import–Refurbishment–Export (IRE) model for used vehicles and auto parts,” the official told Business Recorder.

The SIFC is a high-level body established by the government to act as a single window interface to attract foreign direct investment (FDI).

Under the approved mechanism, used vehicles and components will be imported by EDB-certified operators under a regulated export-oriented framework.

The official shared that the framework draws upon international best practices, including Dubai’s Jebel Ali refurbishment-export model, with vehicles mandated for re-export within prescribed timelines and prohibited from domestic sale.

The official said the initiative has also been incorporated into the draft Auto Policy 2026–31, “positioning Pakistan for integration into the global automotive refurbishment and re-export value chain.”

The project is expected to attract an initial investment of $20–30 million, with potential to scale up to nearly $300 million over time, while generating export earnings and employment opportunities, added the official.