Tyres smuggling render billions of rupees losses

KARACHI: Tyres smuggling continues unabated, incurring billions of rupees in annual losses to national exchequer and impeding growth of local industry, officials said on Thursday.
An official said smugglers pick up used winter tyres from Europe and Japan and channelise them into Pakistan by misusing Afghan Transit Trade Agreement.
According to the industry’s estimate, around Rs8 to 10 billion worth of tyres are annually smuggled into Pakistan, which produced 1.7 million units in 2012 to meet only 20 percent of the local demand. Import meets at least half (4 million) of the local requirements of tyres, while smuggled products (2.6 million) fill rest of the gap. “We are still awaiting the government steps to eliminate the menace of smuggling,” a tyre maker said.
Industry sources said while tyre manufacturers are finding it difficult to maintain their existence Indian manufacturers with the support of their government are busy expanding their operations by buying foreign tyre makers across the world.
They said Indian government has set a plenty of rules to keep the market free of smuggled goods and import duties to safeguard its local tyre industry.
An observer said because of this supportive ambiance, a leading tyre maker in India JK Tyre is poised to enter the US market. The manufacturer has already bought a Mexican tyre maker Tornel.
A media report said: “India-based JK is preparing to roll out JK-branded car and light truck tyres starting around mid-2015, after a $45 million expansion of Tornel’s manufacturing capacity in Mexico City is completed and production is up and running.”
India has a total of 40 listed tyre companies. There are 6 to 8 tyre manufacturers in Pakistan. One is making passenger radial tyres; two tractor tyres and the rest are manufacturing motorcycle tyres. Indian production has already crossed 225 million units. India exported 7.99 million tyres in 2012, while Pakistan still lacks production capacity to meet the country’s entire demand. An industry official said dealers in Pakistan are racking up fantastic profit on smuggled tyres at the cost of economy.