Young voices on Kashmir

Post-August 5: Growing Economic Woes of Kashmir

Irtaza Muhammad
The last one and a half year is considered worst in the contemporary history of the Indian Occupied Kashmir as it has broken the back of its economy. The economic meltdown began with the Pulwama attack wherein forty Indian soldiers were killed followed by the Balakot airstrike 40 km from Islamabad, and an air fight between India and Pakistan in February 2020. It generated an atmosphere of fear and despondency leading to cancellation of the most of business deals.

Subsequently the Indian Parliament unilaterally abrogated the article 35a and 370 of the Indian Constitution on August 5 2019, depriving Jammu and Kashmir of its internal autonomy and dividing the state in two parts. It was accompanied by a nine months long curfew, further followed by a three months lockdown due to Covid-19 which is by and large still in place.

Strict travel restrictions were imposed on the residents along with severing of the modes of communication including internet, cellular and landline services, leading to a complete information blackout. Due to prolonged shutdowns, Kashmir’s fragile economy witnessed huge losses leading to prevalent job cuts and bank defaults. Unemployment ratio took a jump from 15 percent to 22 percent in just two months. Restrictions on logistics and ravaged supply chains proved to be havoc for various economic sectors of the Kashmir Valley.

Apple farming Industry is considered the spine of Kashmir’s economy with 3.5 million people dependent on it. Apple industry contributes two billion dollars to the State’s economy annually. In the post August 5 crucial time, the farmers were unable to find workers for harvest and nobody was allowed to enter Kashmir for trade, resulting in apples rotting on the trees. Some farmers could not even get an access to their farms because of the curfew. Kashmir’s Apple Industry took the biggest hit among all trade sectors.

Kashmir’s Handicrafts have been famous around the world since the times of the 15th-century Ruler Zain-ul-Abidin commonly known as Budshah who brought artisans from Samarkand to train his subjects. This skill was preserved in Kashmir and almost three lac people are associated with Handicraft industry even today which exports items worth Seventeen Hundred crores (INR) annually.

Handicraft is a delicate work which consumes a huge amount of time, and artisans require work order and a constant supply of material to keep their business running smoothly. Handicrafts industry was expecting more business in 2019, but due to curfew and communication blockade, artisans were unable to get in contact with the suppliers. This industry has a big market in e-commerce but due to unavailability of internet services, most of the orders got cancelled. Several Kashmiri women involved in cottage industry had started online business as the demand for Kashmiri traditional outfits and shawls had increased over time but during the chaotic times of the curfew, it became almost impossible for them to continue their entrepreneur projects. Industry suffered another blow after Covid-19 as the world witnessed a global economic lockdown. Handicrafts Industry in the region which has a historical background and depicts culture of Kashmir is currently on the verge of collapse.

Kashmir is known as the “Paradise on Earth” because of its natural beauty and serene locations. It attracts tourists from all over the world and around six lac Kashmiri people are associated with tourist industry. The Government of India issued a travel advisory on August 3 2019, asking tourists to leave Kashmir. Hotels, houseboats and other allied facilities in tourism sector such as the means of transport have suffered and incurred huge losses since then. Kashmiri Shikara (famous traditional Kashmiri boats sailed in Dal lake) Boatmen, who rely on tourist influx for earning their livelihood, have lost a year to curfew, communication breakdown and Covid-19 lockdown.

Government withdrew the travel advisory in October 2019 but the tourists didn’t find the conditions in Kashmir suitable to travel because of curfew and communication blackout.

According to J&K Tourism department data, Kashmir had received 316,434 tourists between August and December in 2018 and this number fell to 43,000 between second half of the year in 2019 showing a decline rate of 86 percent in influx of tourists.

In January 2020, 83-year old Kashmir Chamber of Commerce & Industry, which comprises of 1500 prominent businessmen from the Kashmir valley, released Preliminary Economic Loss Assessment report in which they assessed the economic loss in a span of 120 days. As per KCCI, Kashmir’s economy suffered a loss of 17,878.18 crores (INR) due to curfew and communication restrictions. According to a report, 144,500 people linked with the tourism industry and 4, 96,000 in the commercial sector have lost their job since August 5th this year.

KCCI released this report in January this year and the curfew continued till march followed by another lockdown due to Covid-19.Another preliminary report released by the leading trade body, Kashmir Economic Alliance (KEA) states that the economy of the Kashmir valley suffered losses of 8,416.2 crores in first two months of Covid-19 pandemic lockdown. Doubly ingrained lockdown and restrictions have proven to be devastating for J&K’s economy.

No serious actions have been taken by the authorities to assess the losses incurred by businesspersons and traders for whom the double whammy of lockdown has been no less than an economic nightmare so far.

The Indian Government’s action taken on August 5 did not deprive the Kashmiri people of their semi-autonomous state and the basic human rights but also unleashed an unprecedented wave of chaos in economic sector, leaving it in shambles. People have become vulnerable and crippled financially which has further fueled acrimony in the territory.

Irtaza Muhammad

The writer is associated with the Centre for Peace, Development and Reforms (CPDR).
He can be reached at

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