Srinagar: As Jammu and Kashmir prepares its Budget for 2026–27, a new policy paper submitted by the Kashmir Angel Network (KAN) has called for targeted, execution-driven interventions to support the next phase of growth in the region’s startup ecosystem.
Titled “From Grievance to Growth”, the report is based on a structured survey of 19 active startup founders across the Valley and has been formally placed before the J&K government for consideration in the upcoming budget. It argues that Kashmir’s startups have moved beyond the ideation stage and now require focused policy support to scale operations.
According to the report, most startups in the region are already operational and generating revenue, countering the perception that the ecosystem is largely experimental. The study finds that a majority of ventures are at early or mid-commercialisation stages, having achieved product–market fit but facing systemic barriers to growth.
The report highlights sectoral diversity within the ecosystem, with digital services and education accounting for nearly half of the surveyed startups. Tourism, agriculture, and emerging technologies such as drones and 3D printing also feature prominently, indicating a gradual shift towards knowledge- and service-led enterprises in the regional economy.
A key finding of the report is what founders describe as a “Capital and Compliance Trap”. Access to capital has emerged as the biggest challenge, with nearly half of the surveyed startups still bootstrapped and dependent on personal or family savings. The most acute constraint, the report notes, is the lack of working capital at the growth stage, often referred to as the “Valley of Death”, when firms have viable business models but insufficient liquidity to expand.
Founders told the survey that conventional bank loans, tied to collateral and rigid repayment structures, are poorly suited to innovation-driven businesses. Instead, they called for risk-tolerant seed and growth capital tailored to startups.
Regulatory hurdles were identified as another major obstacle. About 75 per cent of respondents cited the absence of a functional single-window clearance system as their biggest administrative challenge, pointing to fragmented processes across multiple departments. The report also noted low awareness of existing government schemes, with only 37 per cent of founders saying they were fully familiar with available policy support, largely due to complexity and lack of accessibility.
Delays in approvals and disbursements, often ranging from six to twelve months, were flagged as particularly damaging for startups operating in fast-moving digital and service sectors, where such timelines can threaten business survival.
The report also draws attention to talent and mentorship gaps. Startups face difficulties in attracting skilled technical professionals due to salary constraints, contributing to a continued brain drain from the region. Founders also expressed concerns over the quality of mentorship and evaluation, noting that technology-driven ventures are often assessed by non-technical panels.
To address these issues, KAN has proposed five budget-linked measures, including the creation of a single digital compliance portal, a mandatory 30-day service-level agreement for startup-related approvals, subsidies for statutory compliance and operational costs, a government procurement quota for local startups, and a dedicated Rs 50 crore technology fund for digital and tech ventures.
The report emphasises that these measures should be viewed as long-term investments rather than fiscal expenditure, arguing that supporting viable startups through their early cash-flow challenges could help retain talent, generate high-value employment, expand the tax base, and diversify the region’s economy beyond traditional sectors.
As budget deliberations gain momentum, the report positions itself as a bridge between entrepreneurs and policymakers, calling for fewer but more effective interventions focused on execution and measurable outcomes. It concludes that with timely capital, simpler regulations and credible institutional support, Kashmir’s startups are ready to convert resilience into sustainable growth.
