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.