MoC amends IPO to allow import, re-export

MUSHTAQ GHUMMAN

ISLAMABAD: The Ministry of Commerce (MoC) has amended the Import Policy Order 2022 to allow import and subsequent re-export of defence related vehicles/helicopters/assem-blies by State-owned Defence entities and the wholly-owned commercial subsidiaries.

In June 2025, the ECC had approved a proposal of Commerce Ministry on this matter on the recommendation of Special Investment Facilitation Council (SIFC).

SIFC had requested Commerce Ministry to amend the Import Policy Order (IPO), 2022 to allow import and subsequent re-export of defence related vehicles/helicopters/assem-blies by State-owned Defence entities and the wholly owned commercial subsidiaries. Meetings were held in SIFC on the request of two companies, ie, M/s Aero Solutions and M/s Margalla Heavy Industries Ltd wherein concerned Ministries/Divisions including Commerce, Defence, Defence Production, Industries & Production and Federal Board of Revenue (FBR) had supported the proposal with the objective to enhance export potential in the defence sector.

According to the SRO. 118, Commerce Ministry said that in exercise of the powers conferred by sub-section (1) of section 3 of the Imports and Exports (Control) Act, 1950 (XXXIX of 1950), the Federal Government has directed that the following further amendments shall be made in the Import Policy Order, 2022, namely: -

In the Order, in paragraph 5, in sub-paragraph (1) - in clause (b), after the semicolon at the end, the word “and” shall be omitted; and (2) in clause (c), for the full stop at the end, the expression “; and” shall be substituted and thereafter, the following shall be added, namely: “(d) State-Owned Defence Production Entities (DPEs) and their wholly- owned commercial subsidiaries registered in the Export Facilitation Scheme of FBR, for manufacture, rebuild, inspection, maintenance, repair, overhaul, up gradation or value addition for the purpose of re-export only, subject to grant of NOC by Defence Production Division.

In paragraph 13,- (i) in clause (b), after the word “airlines”, the words “aviation Maintenance Repair and Overhaul (MRO) organizations of Defence Division and Defence Production Division and their commercial subsidiaries registered in the Export Facilitation Scheme of FBR” shall be inserted; (ii) in clause (q), after semicolon, the word and” shall be omitted; and (iii) in clause (r), for the full stop, the expression “; and” shall be substituted and thereafter, the following shall be added, namely:-

“(s) Temporary import of used vehicles or vehicle chassis, irrespective of year of production by State-Owned Defence Production Entities (DPEs) and their wholly-owned commercial subsidiaries registered in Export Facilitation Scheme of FBR, for armouring or bulletproofing for re-export only, subject to NOC by Defence Production Division and Interior and Narcotics Control Division.”; and in Appendix-B, in Part-II, in column (4), against Serial No. 29, for the full stop at the end, a colon shall be substituted and thereafter, the following proviso shall be added, namely:-

“Provided further that, aviation MRO of State-Owned Defence Production Entities (DPEs) and their wholly-owned commercial subsidiaries registered in Export Facilitation Scheme of the FBR may also import goods for the purpose of re-export, subject to NOC by the Defence Production Division.”

For the determination of the Input-Output Ratios (IORS) of defense-related technologies under the Export Facilitation Scheme (EFS), it was decided that the requirement of determination of IORS through the EDB may be waived off keeping in view the sensitivities of defense export projects, and as an alternative IORS for the defense export projects may be determined through a committee constituted by MoDP. Amendment for the same in relevant Custom Rules is already under process vide Financial & Accounting Mechanism for Pak - KSA Defence Projects and Similar Other Defence Projects Under Export Facilitation Scheme (EFS) 2021. Ministry of Defense Production (MODP) in this regard has already suggested the composition of said committee to determine the input-output. The FBR will share the said notification with all relevant stakeholders and the SIFC once notified.