Independent Report
Karachi, 16 January 2026: The Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has called on the federal government to immediately declare an industrial emergency to avert a systemic collapse of Pakistan’s manufacturing sector.
FPCCI President Atif Ikram Sheikh highlighted the unsustainable electricity tariffs for industries, noting that while the government promised bills at PKR 22 per unit, businesses continue to receive rates of PKR 34–35 per unit. Sheikh warned that rising energy costs, high interest rates, and restrictive taxation have rendered local industries non-competitive globally.
He demanded that the industrial income tax be reduced from 39% to 20%, with the maximum income tax for salaried individuals capped at 15%. Gas tariffs for industries should also drop from PKR 3,900/MMBTU to PKR 2,400/MMBTU to improve export competitiveness.
Sheikh emphasized that utility cost disparities are driving de-industrialization, causing hundreds of units to close and capital to flee to more business-friendly countries. He called for the elimination of the hidden cross-subsidy burden on industry.
United Business Group Patron-in-Chief S.M. Tanveer stressed that the textile sector, Pakistan’s export backbone, faces an existential crisis, with over 100 mills already closed. Tanveer urged the Monetary Policy Committee to reduce the key policy rate from 10.5% to 9% in the upcoming meeting and gradually to 6% in subsequent sessions.
Tanveer further proposed a multi-pronged recovery framework, including a take-and-pay model for independent power producers, clearance of pending sales tax refunds under the Export Facilitation Scheme, and an immediate flat electricity tariff of 9 cents per unit for export-oriented industries, reducing to 7 cents per unit next year.
FPCCI warned that without swift policy action, the country risks rising unemployment, capital flight, and a prolonged economic downturn.
