ISLAMABAD: Tyre manufacturers have said that smuggling of tyres are causing a revenue loss of Rs50 billion to the national exchequer and also impeding the way for new investment in the industry.
The spokesperson for the Ghandhara Tyre & Rubber Company Limited (formerly known as The General Tyre and Rubber Company of Pakistan Limited) (GTR) said, “New investment in the tyre industry will only come when smuggling stops.”
GTR is Pakistan’s leading tyre manufacturer and has invested over Rs5 billion in the last five years as part of its continuous investment program to upgrade and improve its product quality.
According to an official from the company, “The local tyre industry is facing a huge threat to its survival due to smuggling Tyres. The total estimated value of smuggled tyres comes to around Rs300 billion which results in a loss of over Rs50 billion to the national exchequer.”
“Tyre smuggling has been present in Pakistan for quite some time, resulting in a loss for the tyre industry and putting a huge dent on the national exchequer in the form of revenue loss,” noted Ali Asif, Auto Sector Analyst at Insight Securities.
“Therefore, the government of Pakistan should take necessary action to fix the losses through vigilance at custom level, local markets and at borders with neighbouring countries,” he added.
“The local tyre industry, through import substitution, has been saving precious foreign exchange and contributing to the country’s economy,” said the GTR spokesperson.
The spokesperson added that the total tyre market in Pakistan is close to 14 million tyres, excluding motorcycle and rickshaw tyres. Local production helps meet 15% of the demand, 25% is met through imports while the rest, roughly 60%, are smuggled into the country.