Tyre industry seeks govt help to curb smuggling

KARACHI: The local tyre industry has urged the government to tackle smuggling and low Import Trade Price (ITP) values, which are hurting the sector.

"To safeguard the local tyre industry, the government should focus on measures to curb smuggling. Strict measures include stringent enforcement by the FBR to stop the sale of undocumented tyres and to tighten control at border check posts at Chaman, Torkham and Taftan," Hussain Kuli Khan, Chief Executive Officer, Ghandhara Tyre and Rubber Company Limited (GTR) said on Tuesday.

Khan added that a reduction in duties will not diminish smuggling, which can be gauged by one example: a truck radial tyre 11.00 R20 (70 percent of share in truck bus radial tyres) has zero custom duty (on Chinese origin radial truck tyres), but it is still smuggled in from China in large numbers.

"The importers claim that if duties are reduced, then smuggling will go down, as imports will rise. Last year, the imported tyre numbers nearly halved, but there was no shortage of tyres in the market. This shows that the local tyre industry is capable of meeting the market demand," reasoned Khan.

He said that there is no smuggling in the motorcycle and agriculture tyres, and all demand is catered to through local production as GTR is supplying passenger radial tyres and light truck radial tyres, including SUV variants, in the market.

"Soon, another player will also start production of light radial commercial and passenger radial tyres. A truck bus radial plant is also in operation in Pakistan.

The government needs to safeguard the local tyre industry and give it a level playing field."Also, Khan added that the FBR can bridge tax deficits by maintaining duties on imported tyres and adjusting ITPS based on actual import prices, rather than lowering duty structures.The local tyre industry acts as an import substitute, resulting in savings amounting to millions of dollars. It takes over $100 million to set up a radial tyre plant.