Business community leader says concerned at ME tensions

HYDERABAD: Muhammad Saleem Memon of the Hyderabad Chamber of Small Traders and Small Industry has expressed serious concern over the escalating geopolitical tensions in the Middle East, particularly the potential closure of the Strait of Hormuz. He stated that this situation poses significant risks to Pakistan’s industrial and commercial activities.

He noted that changes in global shipping routes, disruptions in cargo bookings, and the imposition of war risk surcharges ranging from USD1,500 to USD3,500 per container by shipping companies have created severe challenges for domestic industries, especially those in Hyderabad. Additionally, delays of 15 to 20 days in the delivery of raw materials, along with a sharp increase in freight costs, are adversely affecting industrial production and putting the timely fulfilment of export orders at serious risk.

He further stated that industries in Hyderabad are already struggling with multiple challenges, including an ongoing energy crisis, high electricity tariffs, gas shortages, and the depreciation of the Pakistani rupee. The recent increase in diesel prices by Rs. 55 per liter has further escalated inland transportation costs by 15pc to 25pc. As a result, production costs for industrial units are continuously rising, making business planning increasingly difficult.

Chamber President Saleem Memon alarmed that if the current situation persists, Pakistan’s key export sectors particularly value-added textiles could witness a decline of 10pc to 20pc. This would not only put additional pressure on foreign exchange reserves but also lead to the closure of small and medium enterprises (SMEs), resulting in increased unemployment.

He urged the Government of Pakistan to take immediate emergency measures, emphasizing that a comprehensive and effective strategy is now essential to safeguard the industrial sector. He called for the provision of subsidized fuel for industries, an immediate reduction in electricity tariffs, freight subsidies for exporters, and an expansion of export refinance facilities through the State Bank of Pakistan to support export activities.

Copyright Business Recorder, 2026