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

Under the proposed framework, licensed companies would be allowed to bring used vehicles into Pakistan, repair and upgrade them at local facilities, and then ship them to foreign markets. The vehicles would not be permitted to enter the domestic market.

Officials said the model is inspired by the system at Jebel Ali, where imported vehicles are refurbished and re-exported. Policymakers believe the approach could help Pakistan develop a new export stream while creating opportunities for industrial growth.

The proposal has gained momentum after the recent Gulf tensions and is strongly backed by the Special Investment Facilitation Council, which sees the scheme as a potential source of multi-million-dollar export earnings at a time when the country is under pressure to expand outbound shipments.

Officials said the draft policy is currently under discussion with the International Monetary Fund. After consultations are completed, it will be placed before the federal cabinet for approval.

Under the draft, operators would receive duty suspension incentives through the Export Facilitation Scheme to encourage investment in specialized refurbishment facilities.

Only registered companies would qualify. Firms must be incorporated under the Companies Act, present financial and technical capacity, and submit a business plan for refurbishment and exports.

Imported vehicles must be re-exported within nine months. Failure to meet the deadline could lead to action by the Federal Board of Revenue.