Pakistan is preparing to open a new chapter in its export and automotive sectors as the Federal Board of Revenue (FBR) works on amendments to the Export Facilitation Scheme (EFS) 2021. The proposed changes are aimed at supporting the government’s upcoming refurbished vehicle import and re-export initiative.
The plan is designed to allow businesses to temporarily import used vehicles and auto parts, repair or restore them locally, and then export them back to international markets.
A New Export-Oriented Opportunity
The initiative reflects the government’s broader strategy to promote industrial activity, attract investment, and create value-added export opportunities. Officials believe Pakistan could benefit from becoming a regional hub for vehicle refurbishment and engineering services.
To make the project operational, the government is considering revisions to the Import Policy Order 2022 and the Export Facilitation Scheme.
At present, Pakistan maintains strict restrictions on the import of used vehicles and second-hand auto parts, except for a few special categories such as ambulances and firefighting vehicles.
How the New System Will Work
Under the proposed framework, companies would be allowed to temporarily import vehicles classified under PCT heading 8703. These vehicles could only be brought into the country for:
- Repair
- Restoration
- Refurbishment
- Re-export
Businesses participating in the scheme must meet specific conditions. They would need verified refurbishment facilities approved by the Engineering Development Board (EDB) and registration with the FBR under the EFS.
Authorities also plan to introduce strict monitoring measures. Companies would have to submit annual reconciliation reports to customs officials to track imported vehicles and parts.
Restrictions on Local Sales
Government officials have made it clear that imported vehicles and spare parts under this scheme cannot enter Pakistan’s domestic market.
The proposal strictly prohibits the sale, transfer, or disposal of imported units within the country. The entire process is intended to remain export-focused to avoid disrupting the local automobile industry.
Managing Used and Salvaged Parts
One of the major issues discussed during policy consultations was the handling of leftover or damaged parts generated during refurbishment work.
To address this, the FBR is preparing a formal disposal mechanism for salvaged auto components. The aim is to ensure proper regulation and prevent unauthorized use or resale of waste materials.
The proposed rules may also permit the temporary import of second-hand auto parts for repair and refurbishment activities under controlled conditions.
SIFC Approves Pilot Project
The idea gained momentum after the Special Investment Facilitation Council (SIFC) approved a pilot project during its Sectoral Executive Committee meeting held in June 2025.
The council also expressed interest in expanding the model beyond vehicles to include plant machinery and industrial equipment refurbishment in the future.
According to officials, several meetings were held between government departments and industry stakeholders to evaluate the feasibility of the initiative. Stakeholders reportedly supported the proposed policy amendments and recommended moving the plan forward.
Economic Potential and Challenges
Experts believe the project could help Pakistan develop a specialized export industry while generating employment opportunities in engineering, mechanical repair, and technical services.
If managed effectively, the initiative could:
- Increase export earnings
- Encourage foreign investment
- Promote technology transfer and skill development
- Support industrial growth
However, the success of the project will depend heavily on regulatory oversight and transparency. Authorities will need to ensure that imported used vehicles and parts are not diverted into the local market illegally.
The Economic Coordination Committee (ECC) is expected to review the project after one year to assess its performance and determine whether it should be expanded further.
With the proposed amendments now under consideration, Pakistan appears to be positioning itself to tap into the growing global market for refurbished vehicles and industrial equipment.