By: Abrar Khan (Chairman, Jammu & Kashmir Economic Research and Development Forum and KTMF (H))
I write at a time when the world around us is experiencing profound uncertainty. The escalating instability in West Asia, particularly the volatility surrounding the Strait of Hormuz, is not a distant geopolitical drama for us in Jammu & Kashmir. It is an immediate economic concern with real implications for our commerce, industries, agriculture and tourism. As a landlocked regional economy with a nominal GSDP of approximately ₹2.86 lakh crore, our dependence on external energy supplies and transport routes makes us particularly vulnerable to global inflationary shocks and disruptions in international trade.
In recent days, I have engaged in detailed consultations with key stakeholders across our economic ecosystem, including the Kashmir Traders and Manufacturers Federation, the Genuine Kashmir Cottage Handicraft Protection Forum, and the Federation of Chambers of Industries Kashmir, along with horticultural associations and transport unions. These interactions leave little doubt that the potential economic impact of the current crisis is serious and structural. Agriculture and horticulture, which remain the backbone of our rural economy, are already facing rising input and transportation costs that threaten the profitability of farmers and orchardists. Tourism, a sector that supports more than five lakh livelihoods, is also vulnerable. Regional tensions often translate into traveler hesitancy, and even a modest decline in visitor arrivals can ripple through hotels, transport services, handicraft markets and countless small businesses.
The handicraft sector, which sustains around 4.45 lakh artisans in the region, is facing a different but equally troubling challenge. Disruptions in global trade and logistics have slowed or stalled export orders, creating a liquidity crunch for artisans and exporters alike. Our manufacturing and processing units, as repeatedly highlighted by FCIK, are confronting what can best be described as a triple threat: rising freight costs that act as a logistical tax, volatility in raw material prices, and uncertainty around energy availability.
In such circumstances, the response must be proactive and strategic. For artisans and exporters, the government should consider establishing an Export Remittance Support Fund that enables bridge loans against confirmed export orders so that artisans receive timely payments. Trade fair subsidies should be increased substantially, and procedures at the Jammu & Kashmir Trade Promotion Organisation streamlined to ensure wider participation in international exhibitions. At the same time, our producers must be empowered to reach global consumers directly through grants for digital branding and onboarding onto international e-commerce platforms. A dedicated single-window export desk would also help businesses navigate customs documentation, duty drawback claims and schemes such as RoDTEP Scheme.
Industrial units across the region require equally urgent support. Interest-free bridge loans, backed by a government interest subvention mechanism, could provide the liquidity necessary for businesses to maintain operations during this turbulent period. A time-bound freight and fuel rebate would help offset rising logistics costs, while priority energy allocation should be ensured for critical manufacturing units. It is also essential that fixed industrial electricity charges be temporarily waived, shifting to consumption-based billing to relieve immediate financial stress.
Equally important is the need for regulatory stability. A temporary moratorium on interest accrual and loan repayments for affected businesses, along with a freeze on compliance deadlines and statutory filings, would provide the breathing space that enterprises urgently require.
Beyond immediate relief, the government should consider establishing a dedicated geopolitical relief fund for MSMEs and handicraft units, expanding strategic raw material reserves, and investing in logistics infrastructure and renewable energy to reduce long-term vulnerability to global disruptions.
Our business community—from artisans and hoteliers to farmers and manufacturers—forms the backbone of our regional economy. At this moment, they require not just reassurance but decisive policy support. By ensuring regulatory stability, facilitating bridge financing and strengthening economic resilience, we can help our enterprises weather this international storm and secure a more stable future for Jammu & Kashmir.
