Tuesday October 04, 2022

‘Tyre smuggling causing Rs50bn revenue loss to exchequer’

By Our Correspondent
September 23, 2022

KARACHI: Smuggling of new and used tyres into Pakistan is threatening survival of the local industry as up to 60 percent of the country’s total trye market is met through smuggled ones, dealing a huge blow to the industry and government alike, an industry official revealed on Thursday.

“Tyre is one of the top commodities smuggled into Pakistan, thus ruining the local industry badly and causing huge losses of around Rs50 billion to the national treasury,” said spokesperson of GTR Tyre, one of leading manufacturing units in the country.

He added that the total tyre market of Pakistan was close to 14 million (excluding motorcycle/Rickshaw tyres). “Around 15 percent of the demand is met through local production and 25 percent through imports, while the rest 60 percent are smuggled.”

If that 60 percent smuggling was controlled, the gap could be filled by local manufacturers and legal imports, he said.

The spokesperson was of the view that smuggling had been unabated because of lack of coordination between the concerned authorities in the government. He claimed that items under guise of Afghan Transit Trade (ATT) are either unloaded in Karachi or come back from the Afghan border via smuggling.

“The government should re-evaluate 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.

Smuggled tyres are transported from Dubai either in containers or launches then gets unloaded in Karachi from where they are further distributed in different parts of the country, according to the official.

He emphasised that the customs department should ensure that the facility was 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.”

It is pertinent to mention here that GTR was established in 1963 and it started production in 1964. It is the only local tyre manufacturing company that has a technical affiliation with Continental Germany.

The company manufactures steel belted tubeless radial tyres for cars and light trucks while cross-ply tyres for light trucks, buses, tractors, bikes, rickshaws and OTR.

The company has invested around Rs5 billion in last five years to upgrade/improve its product quality and it contributes over Rs4.30 billion annually to the national exchequer besides providing employment, according to the spokesperson.