The President of the Federal B Area Association of Trade and Industries (FBATI), Syed Raza Hussain, has voiced serious concerns over the deteriorating business environment in Karachi. Citing poor infrastructure, soaring costs, and excessive charges from provincial departments, Hussain claimed that many industries are planning to relocate from Sindh to Punjab, despite Karachi’s strategic advantage as a port city. Speaking to journalists, Hussain explained that the lack of essential services is driving industrialists to consider moving their operations.
“Industries in Karachi are struggling with multiple challenges, and many are finding it difficult to maintain profitability,” he said. Water scarcity is one of the primary concerns, with businesses spending heavily on water tankers due to the unavailability of proper water supplies. The state of roads in Karachi further exacerbates the issue, making it difficult to transport raw materials and finished goods. “The roads are in poor condition, and street crime is rampant, costing lives, including those of industrialists,” Hussain added, highlighting the city’s dire security situation. He lamented the lack of regulation and governance, saying, “No one is willing to take ownership of the city.”
The increasing cost of doing business, coupled with high interest rates, is making it difficult for industries to survive. This has led to layoffs and reduced production capacity, which is affecting the country’s exports. Hussain also pointed out that utility prices have surged over the past year, particularly electricity and gas, which have seen up to a three-fold increase.
These rising costs have severely impacted manufacturing and assembly lines. Industries now pay exorbitant fees for water supplies, further driving up production costs across the board. Small and medium-sized enterprises (SMEs) have been hit especially hard by skyrocketing electricity prices. “Several units are on the verge of closure,” said Hussain, adding that the government must renegotiate tariffs with Independent Power Producers (IPPs) to bring down electricity costs for businesses. Hussain also urged the government to introduce financing schemes that would enable industries and SMEs to install solar power plants at affordable interest rates, providing a more sustainable and cost-effective energy source. He emphasized that the government should honor its commitment to pay overdue power subsidies to SMEs based in Karachi.
Citing data from the State Bank of Pakistan (SBP), Hussain noted that credit to the private sector has significantly declined, with industries repaying Rs. 376 billion in loans since the start of the financial year, compared to Rs. 282 billion in the same period last year. He called for an immediate reduction in interest rates to single digits to incentivize local investors and industrialists to expand their businesses. “A specialized scheme by the SBP for large industries and SMEs could provide much-needed relief,” he added. Despite these challenges, Hussain acknowledged that Pakistan’s macroeconomic indicators are showing signs of improvement.
However, he stressed that this recovery would only be sustainable if businesses and industries are stabilized for the long term. “Economic recovery is possible, but it requires a focus on ensuring the health of industries and trade,” he said. Hussain urged the government to create a more conducive environment for attracting investors and industrialists, particularly by improving Karachi’s infrastructure. “The government must develop an ecosystem that supports business growth, starting with essential services like water, electricity, and better roads,” he said, underscoring the importance of Karachi’s role in the country’s economic future.
