Srinagar, March 14: The Federation of Chambers of Industries Kashmir (FCIK) has expressed serious concern over the potential economic fallout of the ongoing Iran–US–Israel conflict on businesses in Jammu & Kashmir, particularly micro, small, and medium enterprises (MSMEs) engaged in handicrafts, horticulture, agriculture, tourism, and small-scale manufacturing.
Responding to a query from the Union Ministry of MSME through its Development & Facilitation Office in Jammu, FCIK warned that prolonged instability in West Asia could disrupt trade flows, energy supplies, and remittance channels, triggering cascading effects on the regional economy.
FCIK highlighted the handicrafts sector, which supports a large artisan population and relies heavily on exports, as particularly vulnerable. “Disruptions in international trade routes and delays in overseas remittances could create liquidity constraints for exporters and traders, affecting thousands of artisans and small producers who depend on timely payments,” the Federation stated.
The Federation also pointed to rising fuel prices and global supply chain disruptions that could increase logistics costs across sectors. The horticulture industry, a key pillar of the region’s economy, may face significant challenges as higher transportation costs make movement of perishable produce to distant markets more expensive, potentially reducing profitability for growers and traders while driving up consumer prices.
The hospitality sector, including hotels, restaurants, and catering services, could also face operational difficulties due to supply constraints and price volatility in LPG and other fuels. FCIK cautioned that prolonged fuel shortages would impact the sector at a time when a robust tourist season was anticipated.
Tourism, another major contributor to the regional economy, remains susceptible to global uncertainty, with prospective visitors reportedly deferring or canceling travel plans. This could adversely affect hotels, houseboats, transport operators, tour agencies, handicraft retailers, and other small service providers dependent on tourist activity.
FCIK emphasized that MSMEs operating with limited working capital are particularly vulnerable to external shocks such as rising input costs, delayed export payments, and fluctuating demand. In response, the Federation urged the Government of India to consider temporary relief measures, including extensions for GST and income tax filings, deferment of EPF and ESI contributions, restructuring of bank loans and working capital servicing, and suspension of recovery actions under the SARFAESI Act.
The Federation also called for uninterrupted availability of LPG and other fuels for the hospitality and food service sectors, alongside measures to mitigate rising logistics costs affecting horticultural produce.
“Timely policy support and regulatory flexibility will be crucial in helping businesses navigate uncertainties arising from the current geopolitical developments and maintain stability in regional economic activity,” FCIK said, reiterating its commitment to continued engagement with the Government of India and other stakeholders to safeguard the interests of MSMEs and traditional sectors in Jammu & Kashmir.
