Karachi: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has urged the federal government to declare an industrial emergency, warning of a potential systemic collapse of the country's manufacturing sector. The call comes amid challenges from high energy tariffs, interest rates, and a restrictive taxation regime, which FPCCI argues are hindering local industries' competitiveness in the global market.

According to Federation of Pakistan Chambers of Commerce and Industry, FPCCI President Atif Ikram Sheikh and United Business Group Patron-in-Chief S. M. Tanveer have criticized the current economic conditions. They highlighted issues such as the disparity in utility costs, with Pakistani exporters facing electricity tariffs significantly higher than those of regional competitors like India, Bangladesh, and Vietnam. This has reportedly led to de-industrialization, closure of units, and capital flight to more business-friendly locations.

Mr. Sheikh has called for the reduction of income tax on industries and salaried classes, along with a decrease in gas tariffs to enhance export competitiveness. He noted that the textile sector, a major component of Pakistan's exports, is in crisis, with over 100 mills shutting down operations. The high interest rates aimed at controlling inflation have also resulted in a liquidity crunch, affecting private-sector credit and industrial growth.

Mr. Tanveer has proposed a recovery framework, urging intervention by the Special Investment Facilitation Council. The FPCCI demands include a shift to a take-and-pay model for independent power producers, clearance of pending sales tax refunds, and provision of a reduced power tariff for the export sector. He emphasized the necessity of granting industries priority over economic resources to prevent unemployment and foreign exchange loss, which could lead to an irreversible economic downturn.