Import, re-export of defence vehicles: ECC approves amendments to import policy order

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved amendments to the Import Policy Order (IPO) 2022 to allow import and subsequent re-export of defence related vehicles/helicopters/assemblies by State-owned Defence entities and the wholly-owned commercial subsidiaries, sources close to the Secretary Commerce told Business Recorder.

Sources said the Ministry of Commerce briefed the ECC in its last meeting that the Special Investment Facilitation Council (SIFC) had approached the Ministry for amending the Import Policy Order (IPO), 2022 to allow import and subsequent re-export of defence related vehicles/helicopters/assem-blies by State-owned Defence entities and the wholly owned commercial subsidiaries. Meetings were held in SIFC on the request of two companies, ie, M/s Aero Solutions and M/s Margalla Heavy Industries Ltd wherein concerned Ministries/Divisions including Commerce, Defence, Defence Production, Industries & Production and Federal Board of Revenue (FBR) had supported the proposal with the objective to enhance export potential in the defence sector.

FBR imposes new levy on locally-made, imported vehicles

For the determination of the Input-Output Ratios (IORS) of defense-related technologies under the Export Facilitation Scheme (EFS), it was decided that the requirement of determination of IORS through EDB may be waived off keeping in view the sensitivities of defense export projects, and as an alternative IORS for the defense export projects may be determined through a committee constituted by MoDP. Amendment for the same in relevant Custom Rules is already under process vide Financial & Accounting Mechanism for Pak - KSA Defence Projects and Similar Other Defence Projects Under Export Facilitation Scheme (EFS) 2021. Ministry of Defense Production (MODP) in this regard has already suggested the composition of said committee to determine the input-output. FBR to share the said notification with all relevant stakeholders and the SIFC once notified.

In pursuance to the proposed amendments shared earlier by SIFC, the Ministry of Commerce had provided its input with the caveat that the provisions to allow import of defence related vehicles/helicopters/assemblies shall be for the purpose of re-export only. Also, that the State-Owned Defence entities and their wholly owned commercial subsidiaries would have to register with the Export Facilitation Scheme (EFS), 2021 of FBR to benefit from any customs duty exemptions. In line with the proposals shared by SIFC vide its letter of March 21, 2025, the following amendments were proposed in the Import Policy Order (2022); (the relevant provisions of IPO, 2022 wherein these amendments had been proposed in the summary:

Copyright Business Recorder, 2025