KARACHI/ISLAM­ABAD: Amid the rising market share of smuggled tyres due to scarcity of raw materials hampering local manufacturing, Ghandhara Tyre and Rubber Company Ltd (GTR) has also suspended its production activities from Feb 13-17.

In a stock filing, the company said it continued to face immense hurdles in importing raw materials and obtaining clearance of consignments from commercial banks. However, it would resume its production from Feb 20.

The local manufacturers have warned the government that if remedial measures are not taken immediately there could be large-scale layoffs too as the recent plant shutdowns by auto assemblers have also caused ripple effects for the tyre industry.

In a letter, the Pakistan Association of Automotive Parts & Accessories Man­ufactu­rers (PAAPAM) has expressed its concern that the smuggled tyres have already captured half of the Pakistani market and if remedial measures were not taken sales of local manufacturers would dip further.

These steps included controlling smuggling, mainly through the Torkham and Chaman borders and there was a need to revisit the Afghan Transit Trade Agreement as it was being misused.

The estimated total value of smuggled tyres comes to Rs300 billion annually depriving the national exchequer of around Rs50bn in lost taxes and duties, the PAAPAM letter has said.

Talking to Dawn GTR chief executive Hussain Kuli Khan suggested that the government has to take practical steps.

“If tyres are imported through regular channels it would not only help the government to raise revenues but would also help the local industry to compete and grow,” he added.

At the same time, the industry warned that if LCs were not allowed to import raw materials the local manufacturers would be left with no option but to stop production and the smugglers would cash in on the situation to capture the rest of the market share.

Mr Khan said that the Federal Board of Revenue has improved enforcement by taking strict measures at the customs level, but efforts are required to check the stock in markets and take action against sellers by confiscating the smuggled tyres.

Published in Dawn, February 12th, 2023