The challenge of smuggled tyres

Ashraf Dharani

Director Pakistan Rubber & Tyre Company (PRTC)

Chairman Pakistan Tyres Importers & Dealers Association (PTIDA)

The start of the year has been very promising for smugglers. Major markets are flooded with smuggled tyres. Aauthorities seem to have turned a blind eye to rampant smuggling of this item. In the Federal Budget of 2021-2022, the government imposed an additional Regulatory Duty (RD) of 10% on tyres. Generally speaking, the government has been highly supportive of the local industry even though the latter caters for only 20% of the local demand. Since the beginning of the current fiscal year increased RD, rupee devaluation and increase in the rates of imported items have resulted in approximately 45% cost hike. The price differential between smuggled tyres for cars, light trucks and trucks/buses has risen dramatically, leaving the end-user with no choice but to go for smuggled tyres .

Thee share of smuggled tyres is likely to grow in coming months and years. Not only do smuggled tyres pose a threat to the livelihood of those linked with legal import of tyres, they also constitute a serious threat to the local industry. It is, therefore, about time the government took strict administrative measures to control this illegal trade. Furthermore, the government must also take certain fiscal steps aimed at reducing/eliminating RD on various tyres in the larger interest of legal trade.