Syed Hamid
Srinagar- The Federation of Chambers of Industries Kashmir (FCIK) has voiced deep concern over the mounting economic distress in Jammu & Kashmir triggered by the ongoing West Asian conflict, urging immediate government intervention through a comprehensive relief and stabilization package.
In a communication addressed to the Commissioner/Secretary of the Industries & Commerce Department, FCIK stated that more than five weeks into the conflict, its cascading economic effects are now being felt across all sectors of the region. What initially appeared to be a distant geopolitical issue has rapidly evolved into a direct economic disruption, with businesses grappling with rising input costs, supply chain disruptions, delayed receivables, and a severe liquidity crunch.
Detailing sector-specific impacts, FCIK noted that the export sector—particularly Kashmir’s handicrafts industry—has been significantly affected. Consignments remain stalled at multiple stages, while payments from overseas buyers have either been delayed or deferred. This has slowed remittance inflows and disrupted production cycles, adversely impacting both artisans and exporters.
The horticulture sector, a key pillar of the region’s economy, is also under pressure due to escalating transportation costs driven by rising fuel prices. These increased costs have eroded profit margins and reduced the competitiveness of perishable goods in national markets.
FCIK further observed early signs of strain in the tourism sector, with rising airfares and prevailing uncertainties leading to cancellations and weaker forward bookings. Additionally, disruptions in remittance flows from the Gulf region have compounded the situation, affecting household incomes and dampening local consumption.
The Chamber emphasized that the cumulative impact is most visible among MSMEs, which are already operating under constrained conditions. Many are struggling to meet operational expenses, service existing debt, and sustain employment levels.
Describing the situation as an “economic exigency,” FCIK called on the government to initiate immediate measures in coordination with the Government of India and the Reserve Bank of India. Suggested interventions include regulatory forbearance for banks, enhanced credit support for MSMEs, and liquidity infusion measures.
The Chamber also proposed sector-specific relief measures such as 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, FCIK has sought a uniform interest concession on loans, enhancement of working capital limits, a moratorium on repayments, suspension of coercive recovery actions under the SARFAESI Act, and the introduction of a transparent One-Time Settlement scheme. It further recommended deferment of statutory dues, relief in power tariffs, and the announcement of a power amnesty scheme for industrial and commercial consumers.
FCIK also stressed the urgent need for clearance of all pending government payments to MSMEs, contractors, and suppliers to inject much-needed 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 cautioned.
Reiterating its commitment, FCIK expressed willingness to work closely with the government in designing and implementing policy responses to mitigate the adverse impact of the ongoing crisis.
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