Key Takeaways
- Pakistan is proposing a used car import, refurbishment and re-export model under the draft Auto Policy 2026-31.
- The framework is inspired by Dubai’s Jebel Ali system and will not allow these vehicles into the local market.
- Only registered companies with financial, technical and export capacity will be allowed to operate under the scheme.
- Vehicles imported for refurbishment will generally have to be re-exported within nine months of arrival.
- The plan is being discussed with the IMF before it is taken to the federal cabinet for approval.
A New Export Route for Pakistan’s Auto Sector
Pakistan is preparing a new policy route that could allow licensed companies to import used vehicles, refurbish them locally and then re-export them to international markets. The proposal is part of the draft Auto Policy 2026-31 and is being presented as a way to increase exports, attract investment and create specialized activity in the automotive sector.
The idea is not designed to open the door for more used cars in Pakistan’s domestic market. Instead, the vehicles brought under this framework would remain tied to an export-only model. After refurbishment, they would be shipped abroad, helping Pakistan earn foreign exchange without adding pressure to the local vehicle market.
How the Refurbishment and Re-Export Model Would Work
Officials are considering an import-refurbishment-export framework similar to Dubai’s Jebel Ali model, where used vehicles are brought into a controlled zone, improved through professional facilities and then exported to other destinations. Pakistan wants to use this structure to build a regulated business line around vehicle repair, testing, parts replacement and export handling.
Under the proposed mechanism, companies would be able to import used vehicles only for refurbishment and onward shipment. They would not be allowed to sell these vehicles inside Pakistan. This restriction is important because the government wants the policy to support exports, not create another channel for domestic used car imports.
Strict Conditions for Licensed Companies
The scheme would not be open to informal traders or unregistered operators. Only companies incorporated under the Companies Act would be eligible to apply. These companies would need to show financial strength, technical capacity and a proper business plan explaining how they will refurbish vehicles and export them within the allowed period.
Eligible firms would also need approval from relevant ministries as sectoral export projects. They would have to register under the Export Facilitation Scheme and prove that their facilities meet infrastructure requirements verified by the Engineering Development Board. This means the government wants the system to be structured, documented and easier to monitor.
Duty Incentives and Nine-Month Export Deadline
A key attraction for investors would be duty suspension incentives under the Export Facilitation Scheme. These incentives are expected to reduce the upfront cost burden for companies that import vehicles only for value addition and re-export. The aim is to encourage investment in refurbishment workshops, skilled labor, inspection systems and export logistics.
Vehicles imported under the scheme would normally have to be re-exported within nine months of arrival. In exceptional cases, limited extensions could be allowed if a company gives valid justification and provides additional financial security. If a company fails to re-export vehicles within the prescribed time, the Federal Board of Revenue would be able to take action under applicable rules.
Why the Proposal Matters for the Economy
The proposal has gained attention at a time when Pakistan is looking for practical ways to increase exports and reduce pressure on its external accounts. The Special Investment Facilitation Council is strongly backing the plan because it sees the model as a possible source of multi-million-dollar export earnings and new investment in a sector that already has engineering and technical potential.
The policy is still at the consultation stage and is being discussed with the International Monetary Fund before being placed before the federal cabinet. If approved and implemented carefully, the scheme could help Pakistan enter a niche part of the global automotive value chain. However, its success will depend on strict controls, transparent approvals and strong enforcement to ensure the vehicles are refurbished for export only.
