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April 15, 2021

Tyre-makers demand Afghan transit trade loopholes plugged

Business

April 15, 2021

KARACHI: Local tyre-makers believe Afghan Transit Trade Agreement (ATTA) is being misused and to stop that institution of a joint commission comprising officials from both sides is imperative, an industry official said on Wednesday.

“This will also facilitate the Afghan government to import some items which are not in the prohibited items or negative list as defined in the agreement but unfortunately the channel was badly misused,” said Hussain Kuli Khan, Chief Executive General Tyre, in a statement.

Khan said that ATTA, signed in 1965, had many loopholes and it was a known fact that through these cracks the bulk of smuggling activities were carried out.

“For example, tyres are imported to Afghanistan via Karachi but they never make it there and find their way back to Pakistan through illegal means. A big quantity finds its way back into the country flooding the markets in the major urban centers of the country with the goods imported under the ATT,” the General Tyre chief said.

He urged Federal Board of Revenue (FBR) to make sure no tyres without documents were sold in the market.

“We appreciate that FBR has taken some actions against the smugglers but it has to be a sustained effort. FBR needs to be more vigilant and should raid the markets and seize the tyres that without the valid documentary proof of legal imports.”

He also highlighted the need of crackdowns against the warehouses of illegal tyres.

“With the development of the auto sector in Pakistan, new possibilities are also emerging for the tyre industry; however, the smuggling of tyres is a major obstacle to the local tyre industry,” said Khan.

“Local tyre industry needs level playing field. In the economic development of any country, the role of the local industry is very crucial. It’s like a backbone of the country. The government must support it.”

He added that the local tyre industry would be geared up to meet the ever rising demand of tyres in Pakistan but it would depend on to the extent the smuggling wass curbed.

“The last six months show that it can be achieved. The government should know that rampant smuggling in the name of ATT is a serious challenge that is restricting local tyre industry to invest more in the manufacturing facilities,” Khan said.

Country’s annual tyre consumption is around 10 million excluding TBR (truck and bus radial) and motorcycle tyres. The local tyre industry contributes to the 18-20 percent of the country’s demand, while imports are accountable for 15 percent and the rest is undocumented or smuggled.