Despite marginal re-valuation by FBR of the ceramic tiles from Iran, the dumping of tiles from the neighbouring country is even sped up and tiles worth over Rs 12 billion have been dumped into local market in just 12 months.
The shocking figures of illegal imports of tiles from Iran have been quoted by the All Pakistan Ceramics Tiles Manufacturers Association (APCTMA).
The importers of Irani tiles had chosen to smuggle the tiles from Iran in the first place but then opted to illegally import it by way of bringing in multiple truckloads of tiles by showing one invoice.
The unchecked influx of smuggled Iranian tiles flooded in the local market across the country depriving exchequer of hundreds of millions rupees revenue besides threatening to the survival of the local industry.
The already ailing ceramics industry in Pakistan has expressed its utter disappointment over the frequent smuggling and illegal imports of ceramic tiles from Iran causing huge monetary losses to the national exchequer.
The tile dealers in Karachi said that Iranian traders had offered them a cheap rate of various types of Iranian tiles which were almost 25 to 35 per cent cheaper than local products due to massive theft of duties and taxes by the smugglers. These smugglers keep showing just one single invoice to the customs authorities and get the multiple truckloads of Irani tiles cleared.
The association had written to the then FBR chairman a few months ago about the smuggling of Irani tiles at a fast pace and mentioned that the importers had imported over 3.2 million square meters of tiles from Iran in March 2014 which was the highest ever quantity of tiles imported from one single country in a month.
It is pertinent to mention that though customs’ documents show a huge inflow of Irani tiles every month, however, a much bigger quantity smuggled into Pakistan from Iran is not documented.
Extremely worried over the situation, the ceramics’ tiles manufacturers have called an emergent meeting in Lahore last month in order to ponder over the situation and devise some policy of their survival. According to the association, a number of tiles manufacturing units have been closed down and few others are considering closing down their tiles making plants.
According to the association’s sources, only seven manufacturers – Shabbir Tiles and Ceramics, Master Tiles and Ceramics, Karam Ceramics, Emco Industries, Sonex Tiles and Ceramics, Swat Tiles and Ceramics and Frontier Ceramics – have left in the competition but with massively slashing their production. They said Irani tiles were being imported even lower than duties being paid by the importers on import of Chinese tiles.
They said the huge influx of Chinese tiles had already hit the local industry in the recent past and now the Iranian tiles were being pouring in frequently with the connivance of customs staff at the dry ports and borders especially at Taftan.
The local tiles manufacturers said the importers were bringing 10 truckloads of Iranian tiles via Taftan border every day and pay duty on one truck only while the rest of the truckloads were being warehoused in Karachi, Lahore, Faisalabad, Rawalpindi, Gujranwala and other cities causing hundreds of millions rupees loss of duties and taxes to the exchequer.
Iran has been facing UN sanctions; hence it is dumping its tiles in Pakistan. The Iranian tile-making units enjoy massively subsidized gas but it is smuggling tiles to Pakistani market despite the fact that it has no banking channels with Pakistan or facility of opening of letter of credit.