The CEO of Ghandhara Tyre, Hussain Kuli Khan, has expressed concern about the growing problem of tire smuggling, which has caused significant damage to the industry in the last six months. Reports suggest that inferior quality smuggled tires are readily available in major cities, attracting customers with lower prices during tough economic times. While acknowledging that the local industry provides employment opportunities and revenue for the exchequer, Hussain noted that GTR alone contributes more than Rs 4.29 billion annually to the national exchequer.
In addition to the impact of tire smuggling, the industry is already struggling due to a shortage of raw materials and the government’s refusal to open LCs. The majority of raw materials used by Ghandhara Tyre are imported from approved sources to save precious foreign reserves. However, the influx of smuggled tires, particularly passenger car radial tires, has further worsened the situation.
The decline in tire imports due to the economic crisis and rupee depreciation has created a vacuum, leading to a 47% decrease in tire imports in the first half of the current fiscal year. This has fueled the illegal tire trade, with the import of passenger car tires alone declining by 55% on a YoY basis.
The Collectorate of Customs Enforcement has confiscated over 55,000 smuggled tires worth Rs 540 million in Karachi during the first six months of the current fiscal year, with most of them being of Chinese origin and having changed specifications, serial numbers, sizes, and manufacturing dates. Customs officials have reported that smugglers are using various tools to ensure that the smuggled tires are identical to the import GDs of other imported consignments.
Hussain believes that the government must take effective measures to curb tire smuggling and provide equal business opportunities to the local industry. He suggests that the government should check the stock in the markets to ensure proper taxes have been paid and take action against sellers by confiscating illegally imported tires. He also emphasizes the need for an assessment of items being imported through the Afghan Transit Trade to ensure that the tires being imported are in line with the vehicle population in Afghanistan. The customs department needs to ensure that this facility is not misused.