Local industry in a shambles: Estimated value of smuggled tyres has topped Rs300bn, says GTR

KARACHI: The local tyre industry is going through a difficult time as the total estimated value of smuggled tyres soars to over Rs 300 billion, providing over Rs 50 billion financial shocks to the national exchequer.

“Tyre is one of the top commodities which is being smuggled into Pakistan, thus ruining local industry badly and causing huge losses to the national treasury,” said spokesman General Tyre (GTR).

He said that the company invested more than Rs 5 billion in the last five years or so as part of its continuous investment program to upgrade/improve its product quality. This continuous investment enables the company to contribute over Rs 4.3 billion annually to the national exchequer besides providing employment.

However, the local tyre industry is facing a huge threat to their survival in the shape of smuggling as the total estimated value of smuggled tyres comes to over Rs 300 billion which results in the loss of over Rs 50 billion to the national exchequer.

He said that the total tyre market of Pakistan is close to 14 million (excluding motorcycle/Rickshaw tyres) 15% of the demand is met through local production and 25% through imports while the rest 60% are smuggled.

Furthermore, he said that if this 60% smuggling is controlled, this gap could be filled by local manufacturers and legal imports and ultimately GOP will get its legitimate revenues which is a need of time.

“Smuggling continues unabated due to lack of coordination between the government authorities who are responsible to control it,” said GTR Spokesman.

He said that items under the guise of Afghan Transit Trade are either unloaded in Karachi or come back from the Afghan border via smuggling.

“The government should re-evaluate the data of the items being imported via the ATT and see if the numbers of tyres being imported are supported by the vehicle population in Afghanistan,” suggested GTR Spokesman.

He said that this needs to be addressed and the customs department should ensure that this facility is not misused.

“The government should protect the local industry and national treasury from the damage caused by smuggling. Effective measures have to be taken to curb the smuggling to improve the competitiveness of the local industry and to provide equal business opportunities,” said GTR spokesman.

Copyright Business Recorder, 2022