The Economic Coordination Committee (ECC) of the Cabinet has approved amendments to the Import Policy Order (IPO) 2022, permitting the import and subsequent re-export of defense-related vehicles, helicopters, and assemblies by State-owned defense entities and their wholly-owned commercial subsidiaries, Business Recorder reported, citing sources.
The Ministry of Commerce briefed the ECC during its last meeting, stating that the Special Investment Facilitation Council (SIFC) had requested changes to the IPO to enhance the export potential of the defense sector.
The request followed meetings with companies like M/s Aero Solutions and M/s Margalla Heavy Industries Ltd., which were supported by various ministries, including Commerce, Defense, and Industries, with the goal of boosting defense exports.
To determine the Input-Output Ratios (IORS) for defense-related technologies under the Export Facilitation Scheme (EFS), the ECC agreed to waive the standard IORS determination through the Engineering Development Board (EDB), citing the sensitive nature of defense exports.
Instead, IORS for these projects will be decided by a committee formed by the Ministry of Defense Production (MoDP). The relevant amendment in customs rules is already in progress.
The Ministry of Commerce also emphasised that the import of defense-related items would be allowed solely for re-export purposes.
Additionally, state-owned defense entities and their commercial subsidiaries must register under the FBR’s Export Facilitation Scheme (EFS), 2021, to benefit from customs duty exemptions. These amendments were proposed by SIFC and were reviewed in line with the IPO 2022 provisions.
