J&K’s Exports on a Shocking Decline

ZT Exclusive (Published in print edition)

Jammu & Kashmir’s exports have witnessed a steep decline in the past five years. From Rs 1043 crore worth of exports in 2013-14, the state’s exports have come down to Rs 341 crore in 2017-18. This situation has serious implications for the state’s job sector and overall economic wellbeing. This situation, worse, aggravates the state’s balance of payments.

What has brought the state to this pass? What steps need to be taken to revive exports? This week Ziraat Times and J&K Economic Conclave analyse the causes and features the views of industry and commerce leaders from Kashmir and Jammu regions on the causes and the corrective steps required to reverse this slide.

Value of exports from J&K (Rs. In Crores)
2013-14 – Rs 1043 crore

2014-15 – Rs 940 crore

2015-16 – Rs 813 crore

2016-17 -Rs 791 crore

2017-18 – Rs 341 crore

J&K’s key exports that have gone down

1. Shelled Walnuts (Fresh or Dried) – Have come down from Rs 132 crore in 2014-15 to Rs 22 crore in 2017-18.
2. Carpets and floor coverings knotted of other textile material – While the state exported these items worth Rs 79 crore in 2014-15, they have come down to a paltry Rs 22 crore in 2017-18.
3. Shawls, Scarves, Mufflers etc. of Silk/Silk Waste – The decline is from Rs 129 crore in 2014-15 to Rs 31 crore in 2017-18.
4. Yarn of Polyester Staple Fibres – The exports have gone down from Rs 77 crore in 2014-15 to Rs 36 crore in 2017-18. 
5. Mushrooms Prepared/Preserved – Mushroom exports have witnessed a huge decline. From Rs 55 crore in 2014-15, J&K has earned a paltry to Rs 8 crore in 2017-18.
6. Generating sets with compression ignition internal combustion piston engines (diesel/semi-diesel engines) of an output exceeding 375 kva – Their exports are down from Rs 15 in 2014-15 to Rs 6 crore in 2017-18.

Exports that have done relatively better 

1. Insecticides – Rs 1 crore to Rs 5 crore 
2. Derivatives of Pyridine – Rs 0 to Rs 14 crore
3. Rectangular (including square) plates sheets, strip of aluminium not alloyed – Rs 1 to Rs 10 crore 

Source: Department of Commerce, MoC&I, Government of India

What industry leaders have to say

Rakesh Gupta
President Jammu Chamber of Commerce and Industries

This decline in exports can be attributed to law and order situation and a lack of support from the government. It is ultimately the entrepreneur who has to suffer. Whenever the government formulates any policies, they don’t take all the stakeholders into consideration.
Here, we don’t have any incentives on export business and then we have connectivity issues as well. The government has been no-serious towards exports even after the flood situation and the turmoil. They need to re-look the policies and that’s how we might revive it.

Mohammad Yaseen Khan
President, Kashmir Economic Alliance

The main reason is the situation we are into followed by GST implementation and demonetisation. There is almost 60% downfall and it will keep increasing if measures are not taken. We need to have a good atmosphere to operate the business. Normalcy will be the most required thing for smooth operations of the business. GST isn’t settled yet, not only in Kashmir but the whole country. Need to improve our tourism, provide good marketing to Horticulture and timely logistics for the produce in CA Stores. Even those who are employed, don’t get a good working atmosphere here.

Sheikh Ashiq
President, KCC&I
There can be multiple reasons for the decline in exports. The government has been doing nothing so far. They have formed some committees but there is no outcome. The government doesn’t provide any subsidy to the artisans or handicraft industries. This industry so far has survived on its own. There has been no government intervention so far and if it continues, it will increase unemployment here. The government has already declared the carpet industry as sick. The next step should be the treatment of the sick industry instead of allowing it to reach deathbed.

Prof. Nisar Ali
Economist
The disturbance due to political instability has always been the main reason for the decline in exports. And mainly it’s because of the lag that happens with the manufacturing of those export items where we see the decline. There is the issue of transport and general shutdown which hampers to the manufacturing activities of those export items. With the general shutdown, products don’t reach to the ultimate market destinations.. Power has been always the bottleneck and hence, adds to the factors or reasons being responsible for such decline. If we talk about walnut, there has been an increase in the production but the market uncertainties, and infrastructure doesn’t allow the products to reach the market on time.

Sujiv Jain
MD, Karamhans Foods Pvt. Ltd
There is no separate policy with regard to the export business. We need to identify new markets and enlarge our export basket. The products we get from LOC enter our markets and compete with our products. It’s not helping the local economy at all. Local taxes should be exempted from production and we need to have a policy for an export business that will apply on a continuous basis. J&K is a land of artisans, tourism and horticulture industry. There is a need to boost our business at the government level. 

Rattan Dogra
President, Industrial Estate, Gangyal
The government has never encouraged our export business and that can be the reason for the decline in export at first step. Kashmir based politics also disturb the business of the state in one way or other. Once we get a good working atmosphere, more and more people can get employment under export business or the industries that have scope for export activities. We are in no position to compete for the products from other parts of the country.

Lalit Mahajan
President, Industrial Estate, Bari Brahma
The current political situation is a mess and there are no incentives on export business. If we want to revive our export business here, immediate steps should be taken for freight subsidy. The government needs to encourage export-oriented businesses in the state. J&K is the only state where there is no benefit for export. The government should provide reimbursement on inward freight because we have no container depot here and it increases our cost of production and hence leaves us in a position, where we aren’t even able to compete with other products that reach our markets on slightly lower costs.

Deepak Dhawan
President, Industrial Estate, Birpur
The main reasons for the decline are GST and political disturbance. Government is non-serious for the economy of the state.  The industry is not a priority in our state. Toll tax and other clearance taxes are also hampering in our way.