Local industry in shambles: Estimated value of smuggled tires topped Rs 300 billion, says GTR – Business & Finance

KARACHI: The local tire industry is going through a tough time as the estimated total value of smuggled tires stands at over Rs 300 billion, causing financial shocks of over Rs 50 billion to the Treasury.

“Tyre is one of the major contraband commodities in Pakistan, thereby severely ruining the local industry and causing huge losses to the national treasury,” said spokesman General Tire (GTR).

He said the company has invested more than Rs 5 billion over the past five years or so as part of its continuous investment program to upgrade/improve the quality of its products. This continuous investment allows the company to contribute more than Rs 4.3 billion per year to the public treasury in addition to providing jobs.

However, the local tire industry faces a huge threat to its survival in the form of smuggling as the estimated total value of smuggled tires amounts to over Rs 300 billion resulting in loss of over 50 billion rupees for the Treasury.

He said the total tire market in Pakistan is close to 14 million (excluding motorbike/rickshaw tyres) 15% of the demand is met by local production and 25% by imports while the The remaining 60% is smuggled.

Further, he said that if this 60% contraband is controlled, this void could be filled by local manufacturers and legal imports and ultimately the GOP will get its legitimate revenue, which takes time.

“Smuggling continues unabated due to lack of coordination among government authorities responsible for controlling it,” the GTR spokesperson said.

He said items under the guise of Afghan transit trade are either unloaded in Karachi or returned from the Afghan border via smuggling.

“The government should reassess the data of items imported through the TCA and see if the number of imported tires is supported by the vehicle fleet in Afghanistan,” the GTR spokesperson suggested.

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

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

Copyright Business Recorder, 2022

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