Smuggled tyres have again emerged in the market and it is now business as usual despite there being a visible slowdown last year when the government took action to curb smuggling for a few months, said Hussain Kuli Khan, CEO Ghandhara Tyre & Rubber Company Limited.
“The government should re-evaluate the data of items being imported via the Afghan Transit Trade Agreement and see if the numbers of tyres being imported are supported by the vehicle population in Afghanistan. Items under the guise of ATT are either unloaded in Karachi or come back from the Afghan border via smuggling and this needs to be addressed,” said Hussain.
He further said that the local industry is the backbone of any economy and it’s a primary responsibility of the government to provide protection and safeguard local industry’s interests so that, in return, they can create employment opportunities, pay taxes to the national exchequer and save foreign exchange for the country.
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“The import of tyres has in the past year decreased significantly due to the devaluation of Pak rupee against the U.S dollar and this shortage has been filled by the heavy influx of smuggled tyres.
“The smuggled tyres are of inferior quality, openly available at all main city centers. But unfortunately due to their low prices, people are buying them without knowing the repercussions,” said CEO GTYR, which was formerly known as The General Tyre and Rubber Company of Pakistan Limited.
He mentioned that the smuggled tyres arrive in substandard conditions, exhibiting torn tyre beads and structure along with tampered dates. Subsequently, smugglers employ mechanical tools to rectify the deformed tyres, significantly diminishing their operational lifespan and posing a considerable risk to public safety.
Additionally, forged documents are circulated to make these tyres appear identical as per the import GDs of other imported consignments.
The annual consumption of tyres in Pakistan is 14.5 million.
Around 25% demand is met by domestic production and 10% of tyres are imported legally while the remaining is through grey channels.
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According to an estimate, smuggling of tyres alone is costing the national exchequer more than Rs70 billion annually while also crippling local tyre industry.
Hussain said the heavy influx of smuggled tyres can be gauged by the actions of the Collectorate of Customs Enforcement (CCE) as they confiscated over 55,000 smuggled tyres, mainly bigger car tyre sizes worth approximately Rs 540 million in Karachi last year.
He said that the local industry is playing its role in providing revenue to the exchequer along with providing employment as GTR alone contributes over Rs3.2 billion annually to the national exchequer.
He further urged the government to take effective measures to curb the smuggling of tyres to improve the competitiveness of the local industry and provide equal business opportunities to the local industry.