Srinagar, April 5: The Federation of Chambers of Industries Kashmir (FCIK) has raised serious concerns over the mounting economic distress in Jammu & Kashmir, attributing it to the prolonged impact of the ongoing West Asian conflict, and urged the government to roll out an immediate relief and stabilization package.
In a communication addressed to the Commissioner/Secretary of the Industries & Commerce Department, FCIK said that more than five weeks into the conflict, its cascading effects have begun to significantly disrupt the region’s economy. What initially appeared to be a distant geopolitical development has now translated into tangible economic challenges, including rising input costs, disrupted supply chains, delayed payments, and an acute liquidity crunch.
The Chamber highlighted that the export sector, particularly Kashmir’s handicrafts industry, has been severely hit. Several consignments are reportedly stalled at different stages, while payments from overseas buyers have either been delayed or deferred. This has slowed remittance inflows and disrupted production cycles, adversely affecting both artisans and exporters.
The horticulture sector is also facing pressure due to rising transportation costs, driven largely by increasing fuel prices. According to FCIK, this has eroded profit margins and reduced the competitiveness of perishable produce in national markets.
The tourism sector, a key pillar of J&K’s economy, is beginning to experience the fallout as well. Rising airfares and prevailing uncertainties have led to booking cancellations and weakened forward demand, the Chamber noted.
Additionally, disruptions in remittance flows from Gulf countries have impacted household incomes, further dampening local consumption and economic activity.
FCIK emphasized that the cumulative impact is being most acutely felt by Micro, Small and Medium Enterprises (MSMEs), which are already operating under constrained conditions. Many are struggling to meet operational expenses, service existing debts, and maintain employment levels.
Describing the situation as an “economic exigency,” the Chamber has called for immediate intervention by the government in coordination with the Government of India and the Reserve Bank of India. It has sought regulatory forbearance for banks, enhanced credit support for MSMEs, and liquidity infusion measures.
The FCIK also proposed sector-specific relief measures, including freight and logistical support for exporters, transport subsidies for the horticulture sector, and rationalization or capping of airfares to revive tourist inflow.
On the financial front, the Chamber demanded a uniform interest concession on loans, enhancement of working capital limits, a moratorium on repayments, and suspension of coercive recovery actions under the SARFAESI Act. It further called for a transparent One-Time Settlement scheme, deferment of statutory dues, relief in power tariffs, and a power amnesty scheme for industrial and commercial consumers.
FCIK also stressed the urgent need for clearing all pending government payments to MSMEs, contractors, and suppliers to inject liquidity into the economy.
“The present crisis is external and beyond the control of local enterprises. Without timely and decisive intervention, there is a real risk of widespread financial distress, business closures, and significant job losses,” the Chamber warned.
Reiterating its commitment, FCIK said it stands ready to work closely with the government in designing and implementing policy measures to mitigate the adverse impact of the ongoing crisis.
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