The resurgence of tyre smuggling is causing concern among local manufacturers, with industry leaders highlighting the negative impact on Pakistan’s economy.
The issue, exacerbated by the devaluation of the rupee, has seen a significant reduction in legal imports, leading to an increase in illicit tyre trade.
Hussain Kuli Khan, CEO of Ghandhara Tyre and Rubber Company Ltd (GTR), pointed out the availability of smuggled tyres of all sizes in the market, a situation that has returned despite previous government efforts to curb the practice.
He emphasized the importance of the local industry in generating employment, contributing to the national exchequer, and saving foreign exchange.
The decline in tyre imports, attributed to the rupee’s devaluation, has led to a supply gap filled by smuggled tyres, often of inferior quality but preferred for their lower prices.
According to Khan, Pakistan’s tyre market demands 14.5 million units annually, with only a quarter being met by domestic production and 10% through legal imports. The remaining demand is fulfilled by smuggled tyres, resulting in a loss of over Rs70 billion annually to the national exchequer and harming local manufacturers.
The Collectorate of Customs Enforcement’s recent confiscation of over 55,000 smuggled tyres in Karachi, valued at approximately Rs540 million, highlights the extent of the problem.
These tyres often arrive in poor condition, with smugglers using mechanical tools to make them saleable, compromising safety and reducing their lifespan.
Khan also raised concerns over the misuse of the Afghan Transit Trade (ATT) for smuggling tyres into Pakistan, suggesting a reevaluation of the imported items under this agreement to match the actual vehicle numbers in Afghanistan.
He stressed the contribution of the local industry, including GTR’s over Rs3.2 billion annual contribution to the national exchequer, and called for stricter government measures to address tyre smuggling and support local manufacturers.
The Pakistan Bureau of Statistics reported a decrease in tyre and tube imports to 1.75 million units, costing $44 million, in the first half of the current fiscal year, down from 1.892 million units ($67 million) a year earlier, highlighting the challenges faced by the industry.
