‘Smuggled tyres cause annual losses of over Rs70 billion’

Tyre dealers call for intervention to protect consumers, boost local industry growth

KARACHI:

Tyre dealers and manufacturers have appealed to the government to take stern action against the smuggling of tyres, aiming to improve the competitiveness of the local industry and provide equal business opportunities. They stressed the need to curb the flow of smuggled tyres to protect local customers from substandard or inferior quality products and to promote the local industry.

Sharing views with The Express Tribune, they said the annual consumption of tyres in the country is 14.5 million, with approximately 25% of the demand met by domestic production and 10% imported legally, while the rest is through grey channels.

They estimate that the smuggling of tyres alone costs the national exchequer more than Rs70 billion annually, also severely impacting the local tyre industry. Although there was a visible slowdown last year when the government took action to overcome smuggling for a few months, it seems business as usual for the smugglers now.

Ghandhara Tyre & Rubber Company Limited (GTR) CEO Hussain Kuli Khan expresses concern, stating, “Smuggled tyres of inferior quality and of all sizes are now easily available in the market. Unfortunately, due to their low prices, people are buying them without knowing the repercussions.” Last year, the Collectorate of Customs Enforcement (CCE) confiscated over 55,000 smuggled tyres, mainly larger car tyre sizes worth about Rs540 million in Karachi, indicating the heavy influx of smuggled tyres.

“The government needs to reassess the data on items imported through the Afghan Transit Trade (ATT) and verify whether the quantity of tyres imported aligns with the vehicle population in Afghanistan. Items supposedly under the purview of ATT are either offloaded in Karachi or return from the Afghan border through smuggling, and this issue requires urgent attention,” he lamented.

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The local industry, he noted, plays a significant role in providing revenue to the exchequer, along with providing opportunities of employment. GTR alone contributes over Rs3.20 billion annually to the national exchequer. “Approximately 60% to 70% of smuggled tyres flood the local markets, causing harm to the domestic industry and, more critically, dissuading potential investors and industrialists keen on establishing new ventures, which is imperative in the current situation. Tyres for various vehicles, including cars, trucks, tractors, and buses, are illicitly brought in from countries such as China, Japan, Thailand, and Indonesia through the Chaman borders,” said Khurram Mustafa Suriya, a prominent tire dealer from Suriya Motors Karachi.

He explained that customers who opt for smuggled tyres due to lower prices often complain about poor quality after some time. He suggested that government relief and incentives for the local industry could lead to more job generation and increased variety and designs in the local market.

Meanwhile, other dealers pointed out that smuggled tyres often arrive in substandard conditions, exhibiting torn tyre beads and structures, along with tampered dates. Subsequently, smugglers use mechanical tools to rectify the deformed tyres, reducing their operational lifespan and posing risks to public safety.

Published in The Express Tribune, February 6^th, 2024.

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