Breaking: CPEC Phase II Expands Special Economic Zones to 44,BoI Confirms
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In Islamabad,a high‑level briefing disclosed that the second phase of the China‑Pakistan Economic Corridor has dramatically boosted approved special economic zones (SEZs) from seven to 44,with 37 new SEZs notified through coordinated efforts led by the Board of Investment.
During the briefing on Pakistan’s engagement with China under CPEC Phase II, officials emphasized SEZ‑led industrialisation and enhanced Pakistan‑China business‑to‑business collaboration as core pillars of the upgraded framework.
The Board of Investment (BoI) acts as the led Pakistani agency for the Joint Working Group on Industrial Cooperation, working with China’s National Development and Reform Commission. Since its inception, the Project Management Unit of the CPEC Industrial Cooperation Development Project has played a crucial role in revitalising Pakistan’s SEZ network.
A senior BoI minister visited the PMU CPEC‑ICDP office in Islamabad to review progress on industrial cooperation and the development of SEZs under Phase II, marking a key moment in oversight and momentum.
The briefing highlighted progress on the Karachi Industrial Park, ongoing initiatives for the Gilgit‑Baltistan SEZ, and the approval of a Land Lease Policy for Bin Qasim Industrial Park to address long‑standing investment bottlenecks. Officials also noted BoI’s role in ensuring utilities provision to SEZs, helping convert plans into operational readiness.
Officials outlined a long‑term plan for CPEC Industrial Cooperation that is now being executed through a structured Action Plan aligned with CPEC Phase II,termed “CPEC Phase 2.0.” The plan prioritises industry‑led growth, export‑oriented manufacturing, technology transfer, and value addition, with SEZs serving as anchor platforms.
The briefing also linked CPEC Industrial Co‑operation with the government’s “Uraan Pakistan” 5Es Framework, underscoring aims to boost exports, enhance competitiveness, and drive lasting development through joint‑venture‑based industrialisation.
It was further conveyed that 2026 will mark the 75th anniversary of Pakistan–China diplomatic relations,and PMU CPEC‑ICDP has lined up commemorative and investment‑oriented activities to deepen bilateral industrial cooperation.
The BoI reaffirmed its dedication to proactive investor facilitation, policy coordination, and effective implementation of Phase II initiatives. it pledged continued collaboration with federal and provincial stakeholders to maintain a predictable, clear, and investor‑friendly surroundings for both domestic and foreign investors.
The briefing also stressed BoI’s structured approach to investment promotion and outreach, particularly with Chinese enterprises, as part of a broader effort to attract sustainable investment and partnerships.
Published in Dawn, January 17, 2026
Key Facts at a Glance
| Metric | Details |
|---|---|
| Approved SEZs in Phase II | 44 (up from 7) |
| New SEZs notified | 37 |
| Lead agency | Board of Investment (BoI) |
| Key coordinating bodies | JWG on Industrial Cooperation; NDRC; PMU CPEC-ICDP |
| Notable sites highlighted | Karachi industrial Park; Gilgit‑Baltistan SEZ; Bin Qasim Industrial Park (Land Lease Policy) |
| Strategic frameworks | CPEC Phase 2.0; uraan Pakistan 5Es |
| Upcoming milestone | 75th anniversary of Pakistan–China ties in 2026 |
Evergreen Takeaways
- Special economic zones are being scaled to accelerate export‑driven manufacturing and tech transfer across Pakistan.
- Strong policy support and reliable utility provision are essential to turning SEZ plans into productive facilities.
- Partnerships with Chinese investors and firms can enhance local capabilities through joint ventures and knowledge transfer.
Reader Questions
Which sector do you believe will most benefit from the expanded SEZ network under CPEC Phase II?
What measures shoudl local industries adopt to take advantage of boi’s investor‑friendly policies and the new SEZ opportunities?
Share your thoughts in the comments below and stay tuned for updates as these developments unfold.
Green‑field projects exceeding $50 m.
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Growth of Special Economic Zones in CPEC Phase‑II
- The number of operational SEZs under China‑Pakistan Economic Corridor (CPEC) phase‑II reached 44 in early 2026, up from 31 at the start of 2024.
- Board of Investment (BoI) spearheaded the latest expansion,fast‑tracking land‑allocation approvals and coordinating multi‑modal infrastructure upgrades.
- New zones span four provinces – Punjab, sindh, Khyber Pakhtunkhwa, and Balochistan – aligning with the strategic “North‑South” trade corridor modeled on the china‑inspired Belt and Road framework.
Key Milestones in the 2026 SEZ Roll‑out
| Date | Milestone | Impact |
|---|---|---|
| Jan 2025 | BoI signed a $1.2 bn master‑plan agreement with the China Development Bank for phased infrastructure funding. | Accelerated utility provision (power,water,broadband) in 12 upcoming zones. |
| Mar 2025 | Launch of Karachi East SEZ – 6,800 acres focusing on petro‑chemicals and port‑linked logistics. | Projected creation of 12,000 jobs by 2028. |
| Jun 2025 | Completion of Sukkur–Larkana Industrial Hub (Phase‑II) – first in Sindh to incorporate renewable‑energy micro‑grids. | Reduces carbon footprint by 15 % vs. legacy zones. |
| oct 2025 | BoI introduced the “One‑Stop Investment Portal” integrating licensing, customs clearance, and tax incentives. | Cuts average setup time for foreign investors from 90 days to 35 days. |
| Feb 2026 | Official inauguration of M‑12 Industrial SEZ near Faisalabad – dedicated to textile tech and apparel manufacturing. | Expected export boost of $1.8 bn annually. |
BoI‑Led Industrial Expansion: Core Strategies
- Incentive Bundles
- 10‑year tax holiday for green‑field projects exceeding $50 m.
- Duty‑free import of capital equipment for the first five years.
- Infrastructure Synchronization
- Integration of CPEC’s ML‑1 railway upgrade with SEZ rail sidings, enabling 40 % faster container turnaround.
- Expansion of Gwadar Port’s inland container depot linked to the new Balochistan SEZs.
- Skill Development Partnerships
- Collaboration with Pakistan Engineering Council to launch vocational centers within each SEZ, targeting 250,000 skilled workers by 2030.
Sectoral Highlights Across the 44 SEZs
- Textiles & Apparel – 16 zones,leveraging Pakistan’s competitive labor cost and existing supply chain.
- Automotive Assembly – 5 zones (e.g., M‑3 Auto Park, peshawar Motor Hub) attracting joint ventures with Chinese OEMs.
- Pharmaceuticals & Medical Devices – 4 zones, supported by a dedicated Regulatory Fast‑Track Desk established by the Drug Regulatory Authority.
- Renewable Energy & Green Manufacturing – 3 zones pioneering solar‑powered production lines, funded through the China‑Pakistan Green Fund.
Economic Impact: Numbers that Matter
- FDI Inflows: Cumulative foreign direct investment in SEZs rose to $13.4 bn in 2025, a 38 % YoY increase.
- Export Growth: SEZ‑driven exports accounted for $9.6 bn in 2025, representing 22 % of Pakistan’s total merchandise exports.
- employment Generation: Over 350,000 direct jobs and 1.2 m indirect jobs created across the 44 zones.
- GDP Contribution: SEZ activities contributed 0.9 % to Pakistan’s GDP in FY 2025/26, projected to reach 1.5 % by FY 2028/29.
Practical Tips for Investors Targeting Pakistan’s SEZs
- Leverage the One‑Stop Portal – Register your project on the BoI portal to access real‑time updates on land availability,utility status,and incentive eligibility.
- Choose the Right Zone for Your Industry –
- Textile firms should prioritize zones in Punjab (e.g., Faisalabad, M‑12) for proximity to raw cotton.
- High‑tech manufacturers may benefit from the Gwadar SEZ due to its ICT‑enabled logistics hub.
- Utilize Tax Holiday Windows – Align major capital expenditures within the first three years to maximize tax relief.
- Engage Early with Local Skill Centers – Partner with vocational institutes to secure a pipeline of trained labor and reduce recruitment costs.
- Plan for Sustainable operations – Explore the green‑energy subsidies available in the newly designated renewable zones to lower long‑term operating expenses.
Case Study: Sino‑Pak automotive JV in M‑3 Auto Park
- Background: In August 2025, a joint venture between BAIC Group and PakAuto Industries launched a $750 m assembly plant in the M‑3 Auto Park.
- Outcomes:
- Production capacity of 150,000 vehicles per year (sedans and electric models).
- Creation of 4,200 skilled jobs within the first 18 months.
- Export of 30 % of output to Central Asian markets via the CPEC road‑rail network.
- Key Success Factors: Early adoption of BoI’s incentive package, integration with the newly completed ML‑1 rail line, and collaboration with local universities for R&D.
Future Outlook: What’s Next for Pakistan’s SEZ Landscape?
- Target of 55 SEZs by 2030 – The government’s long‑term master plan envisions adding 11 additional zones, focusing on high‑value sectors like aerospace and biotechnology.
- Digitalization Initiative – Implementation of an AI‑driven SEZ Management Dashboard slated for Q3 2026, offering investors real‑time analytics on logistics, utility consumption, and market demand.
- Cross‑Border Trade Corridors – Planned linkage of the Lahore‑Islamabad SEZ to the upcoming Karakoram Highway expansion, facilitating direct freight flow into Central Asia.
References
- Board of Investment, Pakistan CPEC Phase‑II SEZ Expansion Report, March 2025.
- ministry of Planning, Development & Special Initiatives, Annual Economic Corridor review FY 2025/26, Islamabad, 2026.
- Dawn Business Desk, “BoI launches one‑stop portal for SEZ investors,” July 2025.
- Pakistan Engineering council, Skill Development in Industrial Zones, 2025.
- China‑Pakistan Green Fund, Renewable Energy Projects in SEZs, 2024‑2026.
