The smuggling of used tyres from India and China is on the rise once again with no check by the government to control its inflows in the local market that caused annual loss of $80 million to national exchequer.
Industry sources said that used tyres have been made available largely in the local markets due to negligence of the government, which is reluctant to take action against smugglers, and failed to provide protection to local industry having set up millions of dollars worth manufacturing plants.
The situation of the tyre industry could be gauged as worst as share of smuggled tyre constitutes two-third of the market as compared with locally-made tyre that is standing at one-third share.
There are many other local industries getting injured due to the open field provided to the unscrupulous players by people of vested interests sitting in the high-level government circles, sources added.
The smuggling of used tyres is putting a huge dent on the exchequer by way of taxes and duties that cause evasions of hundreds of millions of rupees every year because Pakistan has been a dumping ground for many years for countries like China and now India to sell out scrap at bulk, sources said.
The stoppage of tyre smuggling and under-invoicing is not as difficult to the authorities to control but it needs will to fix the losses to the national kitty within few months through proper vigilance at custom level, local markets and border of neighboring states.
Experts said that the second-hand tyres are not compatible for using in the vehicles despite their less capability to maintain quality drive to the motorists, resulting traffic incidents and loss of precious lives. In the tyre industry there is an adage that says ?purchase a used tyre whose history you don?t know?.
These used tyres are considered as an environmental hazard in the developed economies hence, being very conscious of safety standards and rigorous police checks, the motorists discard their tyres replacing them new.
Motorists, in the west, replace their tyres either because the tyres have worn out or because some defect has developed in the tyre unseen to the naked eye or because of poor performance of the tyre.
Experts said that the government must curb the smuggling of the tyres in the country before the repercussions will become more severe in the days to come taking its toll on local industry and risk to lives of innocent people.
They said that the local Industry should be supported like all prospering nations of today?s world are doing to empower their manufacturing sectors, which not only provide jobs to people but generate revenues to national kitty, they said.
Sources have also revealed that the menace of smuggling has already hurt the government, the industry as well as the importers. Smuggling, which has been going on for decades has become easy through the loopholes that existed in the Afghan Transit Trade Agreement of 1965.
They said it is the responsibility of government to provide level playing field to industry and protect its survival but on the insistence of the trading community (who have no assets on ground) the government of Pakistan reduced the import duty on Truck/Bus tyres to just 5.0 percent to stop smuggling. Yet smuggling goes on in Truck/Bus tyres, thereby negating the theory that duty reduction will stop or reduce smuggling.