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Modifications approved for defense vehicle import and re-export policy by Economic Coordination Committee (ECC)

ECONOMIC APPROVAL: Modifications to Import Policy granted by the Economic Coordination Committee (ECC) of the Cabinet in Islamabad.

PAKISTAN'S CAPITAL APPROVES MODIFICATIONS TO IMPORT POLICY THROUGH ECONOMIC COORDINATION COMMITTEE...
PAKISTAN'S CAPITAL APPROVES MODIFICATIONS TO IMPORT POLICY THROUGH ECONOMIC COORDINATION COMMITTEE (ECC) DECISION

Modifications approved for defense vehicle import and re-export policy by Economic Coordination Committee (ECC)

Pakistan Greenlights Imports for State-Owned Defense Entities

In a groundbreaking move, the Economic Coordination Committee (ECC) of Pakistan's Cabinet has endorsed changes to the Import Policy Order (IPO) 2022. These amendments pave the way for state-owned defense companies and their wholly-owned commercial subsidiaries to import defense-related vehicles, helicopters, and assemblies, primarily for re-export[1].

The impetus behind these changes stems from recommendations by the Special Investment Facilitation Council (SIFC) and consultations with defense firms like M/s Aero Solutions and M/s Margalla Heavy Industries Ltd[1]. Various ministries, including Commerce, Defense, and Industries, lent their support to the initiative with the ultimate objective of expanding the defense sector's export potential[1].

To clarify the Input-Output Ratios (IORS) of defense-related technologies under the Export Facilitation Scheme (EFS), the traditional practice of determining IORS through the Engineering Development Board (EDB) will be waived, considering the defense projects' sensitive nature. Instead, a committee established by the Ministry of Defense Production (MoDP) will decide IORS for such projects[1].

The eligible entities are expected to register under the Federal Board of Revenue’s Export Facilitation Scheme (EFS) 2021 to avail of customs duty exemptions[1]. Moreover, it's crucial to note that the import is exclusively sanctioned for re-export purposes[1].

These alterations aim to foster increased participation by state-owned defense entities and their subsidiaries in the global defense market, bolstered by simplified procedures and regulatory backing for export-oriented activities[1].

[1] Business Recorder, 2025.

In light of the amendments to the Import Policy Order 2022, state-owned defense entities and their subsidiaries are now positioned to import defense-related vehicles, helicopters, and assemblies for re-export, potentially shifting their business focus towards international markets. This strategic move in the industry, supported by various ministries, could signify a significant expansion in the finance sector as well, as increased exports may lead to greater financial gains.

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