BY THE WAY: Industrial Stagnation in J&K

A Structural Failure, not a Scale Problem

Dr Noour Ali Zehgeer

As Jammu and Kashmir Union Territory is famous for Saffron, handicrafts and cricket bats since my childhood, as I grew old I heard about Cement factory in Khrew, Hindustan lever factories and Cadbury’s in the state of Jammu and Kashmir which gave me a hope as I graduated that we can be a contributor to GDP in a sizable way and also we will have presence on industrial map of India. Unfortunately, it was dream which never came true as we saw in 1989 almost everything collapsed and we were dependent on Apples and Saffron only. The export gates got closed and hotel industry and hotel related other business were packed in a coffin for good 28yrs. The Government put an agenda in place on election days and claiming UAE investors are investing although I had an argument where is TATA, AMBANI and ADANI before we get ARAB’s to invest in Jammu and Kashmir. The so-called industry was limited to Khyber Milk, SNOW CAP CURD and few joinery mills who were representing JK state industrial map apart from some sick units in Bari Brahmana. The industry minister and LG dispensation failed to revive industries in Jammu and Kashmir citing reasons which were contradictory to their own political statements during elections across India.

The consolation prize of achievement what government can claim is the few lounges and cafes which have come up in different parts of Kashmir and Jammu not really contributing to Unemployment issues or self-employment. Most of these businesses are part of old business families who have struggled in last 3 decades and their grandchildren have forced to experiment something new which is not traditional. The Boom of tourism in last 4 years helped Hotel owner to pay back their old loans and lease out the hotels to outsiders at a cheaper price but a assured income to pay off their loans in the future. The smoothing situation was short lived as Pahalgham episode wiped out the complete season till now.

Much like India’s broader challenge of competing with China without comparable industrial bandwidth or ecosystem depth, Jammu & Kashmir faces a similar—but more acute—constraint. The region lacks not only industrial infrastructure, but also the institutional patience and longterm policy coherence required to build large, employmentgenerating industries. Today, economic ambition in J&K is largely confined to micro and cottage initiatives—such as small manufacturing units, food processing, or handicrafts—most of which struggle to cross a ₹50 crore annual turnover. While these ventures have social and cultural value, they are structurally incapable of addressing mass unemployment or positioning J&K meaningfully on India’s industrial map.

Rs. 1000 crore Apple Industry alone cannot take Jammu and Kashmir out of Shambles. To support this industry, we lack infrastructure. Apple growers had to beg LG Sinha for trucks and highway in better condition.

This reflects a deeper ecosystem failure. Large industries are not created through isolated incentives; they require anchor institutions, deep supply chains, skilled labour pipelines, logistics certainty, and—most critically—trust between government and local industry. Unfortunately, collaboration with local business entities remains minimal, and policy engagement often appears topdown rather than cocreative.

Equally concerning is the absence of large public sector manufacturing investments. Despite repeated policy declarations, J&K has not succeeded in attracting or establishing major PSUled industrial anchors—such as heavy engineering units, railway coach factories, or largescale defence or energy manufacturing facilities. These entities typically act as ecosystem builders, catalysing MSMEs, skilling, and ancillary industries. Their absence leaves a vacuum that small enterprises cannot fill on their own.

The justification most often cited for this gap is security risk. However, this reasoning sits uneasily alongside parallel claims of restored normalcy and stability. If the region is stable enough for political outreach and tourism promotion, but not stable enough for industrial capital or PSU manufacturing, the policy signal becomes contradictory. Such ambiguity increases investor risk perception rather than reducing it.

The consequence is stagnation. Despite administrative changes and repeated reform narratives, the economic structure of J&K remains largely unchanged from the early 1990s—characterised by limited private capital formation, high public dependence, and chronic unemployment among educated youth.

In essence, the issue is not the lack of incentives, slogans, or smallscale schemes. It is the absence of an industrial vision rooted in ecosystem thinking anchor investments, longterm capital commitment, local partnership, and policy consistency. Without this, J&K risks remaining trapped in a lowaspiration equilibrium—where economic activity exists, but transformation never arrives. The economic stagnation of Jammu & Kashmir is often misdiagnosed as a problem of scale—as if the region simply lacks large projects, big factories, or sufficient capital. It is a structural failure. The issue lies not in how big the industries are, but in how the system is designed to create, sustain, and scale them.

An industrial ecosystem is more than a collection of small enterprises or incentive schemes. It requires anchor institutions, predictable policy, skilled labour pipelines, logistics integration, credit depth, and—above all—trust between the state and local industry. In J&K, these structural pillars are either weak or absent. As a result, economic activity remains fragmented, informal, and trapped in lowvalue cycles.

The dominance of microinitiatives with limited turnover is not evidence of grassroots success; it is a symptom of structural ceilings. When policy, finance, land access, and procurement frameworks are not aligned toward growth, businesses rationally remain small. They optimise for survival, not expansion.

Compounding this is the absence of large public or private anchor investments—PSUs, manufacturing clusters, or exportoriented industrial bases—that typically seed broader industrial ecosystems elsewhere in India. Without such anchors, MSMEs cannot evolve into suppliers, innovators, or job creators at scale.

Security is frequently cited as a constraint, yet parallel assertions of restored normalcy send mixed signals. This contradiction creates policy ambiguity, increases investor risk perception, and freezes longterm capital formation. Stability that cannot support factories, supply chains, and workforce mobility is economically incomplete.

In short, J&K’s challenge is not that it aims too small—it is that the system makes aiming big irrational. Until structural enablers replace adhoc schemes and symbolic projects, industrialisation will remain aspirational rather than transformational.

(STRAIGHT TALK COMMUNICATIONS EXCLUSIVE)