Ahmed Khan Malik

Karachi’s power loom sector is experiencing turbulent times due to rising input costs as well as a slowdown in the textile sector, pushing this vital sector to the wall, reports WealthPK.

The rising costs of utilities, especially of electricity, have put an enormous burden on the sector. The electricity tariff has seen a massive hike in the last three years, putting the industry under severe stress. Talking to WealthPK, the people associated with the power loom sector pointed out that the slowdown in the textile sector has put them under tremendous pressure, as the textile sector growth, especially in the value-added sector, has not been matching with the rising cost of production. Power loom, an integral part of the textile sector, plays a key role in earning foreign exchange in addition to providing jobs to millions of workers.

Karachi has the largest number of power looms after Faisalabad. The power looms mainly operate in Karachi, Faisalabad, Multan, Kasur, and Jhang, with 30,000 medium-sized power loom units located in Karachi. A small power loom unit usually comprises six to eight looms managed by 10 to 12 workers, while a medium unit comprises up to 50 looms manned by 60 to 80 workers. About the increase in electricity rates, Tufail Saeed, Vice President of Power Looms Association, said the government should lower the power tariff, enabling the industrial sector to survive.

He said the closure of power loom units will open a floodgate of unemployment in addition to impacting the exports. He contended that unemployment would further worsen the law and order situation, hence reasonable electricity rates should be offered to the industrial sector. He said the government must understand the ongoing economic crisis across the country and called for exempting the power loom sector from the withholding tax in the electricity bills for good instead of forcing them to get this exemption every year.

“We were even facing labor shortage, especially of skilled labor, as the textile industry was exporting at the maximum level around three years ago,” he said, adding that first dollar crunch, then high electricity rates and now heavy taxation have pushed the sector to the wall. Mahmood Syed, a power loom owner in Sher Shah, said the power loom units use shuttle looms, which manufacture both silk (almost exclusively produced on shuttle looms) and cotton. 

He called for the government to roll out a special package for the power loom industry to control the financial crisis and to promote cloth export. “Presently, the power loom industry is bearing multiple direct and indirect taxes, including sales tax,” he said, adding that the current situation has increased unemployment in the country and blocked fresh investment in the power loom sector.

Credit: INP-WealthPk