ECC approves used vehicle re-export scheme with potential $300mn investment

The Economic Coordination Committee (ECC) has approved a framework for the import, refurbishment and re-export of used vehicles and auto parts, in a move aimed at developing an export-oriented automotive refurbishment industry in Pakistan.

According to officials familiar with the matter, the scheme is expected to attract initial investment ranging between $20 million and $30 million, with long-term potential to scale up to nearly $300 million through expansion of refurbishment and re-export operations.

The approval was granted on April 27, 2026, after the initiative remained pending since October 2023 due to regulatory coordination issues involving the Ministry of Commerce, Ministry of Industries and Production, Federal Board of Revenue and Engineering Development Board (EDB).

Officials said the breakthrough came following facilitation by the Special Investment Facilitation Council (SIFC), which worked during the first quarter of 2026 to align the Import Policy Order 2022 and Export Facilitation Scheme 2021 for development of Pakistan’s first Import-Refurbishment-Export (IRE) model for used vehicles and auto components.

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

The framework bars sale of imported vehicles in the domestic market and requires all refurbished units to be re-exported within specified timelines.

Officials said the model has been developed using international refurbishment-export systems as reference points, including Dubai’s Jebel Ali model, which operates as a regional hub for vehicle refurbishment and re-export activity.

The initiative has also been incorporated into the draft Auto Policy 2026-31 as part of broader efforts to position Pakistan within the global automotive refurbishment and re-export supply chain.

Authorities expect the project to generate export earnings and create employment opportunities alongside attracting foreign and local investment into the automotive sector.