Pakistan to Allow Export of Refurbished Used Cars

The government is proposing a new mechanism to import, refurbish, and re-export used vehicles under its draft auto policy for 2026-31, as the government looks for fresh ways to boost exports and attract investment into the automotive sector.

The proposal would establish an import-refurbishment-export framework modeled on Dubai’s Jebel Ali system, allowing licensed companies to bring used vehicles into Pakistan, refurbish them locally and ship them to overseas markets. The vehicles would not be allowed to enter the domestic market.

The plan has gained momentum in the aftermath of the Gulf war and is being strongly backed by the Special Investment Facilitation Council, which sees the scheme as a potential source of multi-million-dollar export revenues at a time when Pakistan is struggling to raise outbound shipments.

The policy is currently being discussed with the International Monetary Fund and will be placed before the federal cabinet after those consultations are completed, the officials said.

Under the draft policy, operators would receive duty suspension incentives through the Export Facilitation Scheme, a move aimed at encouraging investment in specialized refurbishment facilities and integrating Pakistan into the global automotive value chain.

Only registered companies would be allowed to operate under the framework. Eligible firms would need to be incorporated under the Companies Act and demonstrate sufficient financial and technical capacity, including a business plan for refurbishment and exports.

Companies would also be required to secure approval from the relevant ministries as a sectoral export project, register under the Export Facilitation Scheme, and prove that their facilities meet infrastructure requirements verified by the Engineering Development Board.

Vehicles imported under the scheme would have to be re-exported within nine months of arrival, although limited extensions could be granted in exceptional cases against valid justification and additional financial security. Failure to re-export within the prescribed period would trigger action by the Federal Board of Revenue under applicable rules.