KARACHI: Imported, smuggled and under-invoiced tiles have captured 35-40 per cent of the market with Chinese and Iranian tiles easily available across the country.

The heavy influx of smuggled Iranian tiles has not only compelled many local manufacturers to reduce their production, but also caused massive revenue losses to the national kitty.

A spokesperson of Pakistan Ceramics Manufacturers Association told Dawn on Saturday that these tiles were getting clearance from Balochistan at undervalued prices as low as $0.06 (Rs7) per square metre on payment of taxes (duty, sales tax, income tax) of Rs6 per square metre.

While a locally-produced ceramic tile on an average pays Rs100 per square metre in sales tax.

He said over a million metres of Iranian tiles were imported/cleared in the last six to seven months at such low values.

He said the under-invoiced Iranian tiles have flooded the local markets across the country and are being sold at a price that even Chinese manufacturers are unable to match due to the fact that they are smuggled in large quantities from Taftan border and importers mis-declared as tiles are not subjected to physical examination.

He said the smuggling is thriving since the government has yet to play its role to check the entry of these tiles from the informal channels.

Iranian tile-making units enjoy subsidised gas that allows them to keep the price extremely low whereas the local industry is either not getting gas or struggling with the high power tariff.

The spokesperson added that frequent hikes in the natural gas prices in addition to severe outages are the key challenges for the industry to maintain its competitive edge over these imported tiles.

He said the demand for locally-manufactured tiles was shrinking due to huge price difference the imported tiles offered.

The spokesperson was of the view that liberalisation of trade is good but it should not be at the cost of the local industry. “The combined investment in the industry is over Rs35-40 billion with direct employment to over 10,000 people.”

He urged the government to support the industry by eradicating the tax anomalies and devise a transparent system for calculating the reasonable duties and levies on the importers along with correct ITP values so that the local industry could survive.

The government should look at the ceramic product industries of India and China who are getting full support from their respective governments through different incentives.—ASK