Srinagar: The Federation of Chambers of Industries Kashmir (FCIK) has expressed concern over the growing economic distress in Jammu and Kashmir due to the ongoing conflict in West Asia, urging the Government to announce a comprehensive relief and stabilisation package to protect the region’s fragile industrial and business sectors.
In a communication addressed to the Commissioner-Secretary, Industries and Commerce Department, the Chamber said that more than five weeks into the conflict, its impact is now being felt across multiple sectors of the local economy.
FCIK said what initially appeared to be a distant geopolitical development has now translated into a direct economic disruption, with businesses facing rising input costs, disruption in supply chains, delayed payments and an acute liquidity crunch.
The Chamber said the export sector, particularly Kashmir’s handicrafts industry, has been among the worst affected, with consignments stalled at various stages and payments from overseas buyers either delayed or deferred.
It said the slowdown in remittances and disruption in production cycles have adversely affected both artisans and exporters.
The horticulture sector, FCIK said, is also facing difficulties because of the sharp rise in transportation costs triggered by increasing fuel prices, which has reduced profit margins and affected the competitiveness of perishable produce in outside markets.
The tourism sector, too, is beginning to feel the impact, with higher airfares and uncertainty leading to cancellations and a decline in forward bookings, the Chamber said.
According to FCIK, disruption in remittance flows from Gulf countries has further worsened the situation by affecting household incomes and reducing local consumption.
The Chamber said the cumulative impact of these developments is most visible on micro, small and medium enterprises (MSMEs), which are already operating under financial constraints and are struggling to meet operational expenses, repay existing loans and maintain employment.
Describing the prevailing situation as an “economic exigency”, FCIK called upon the Government to take immediate measures in coordination with the Government of India and the Reserve Bank of India.
Among the measures sought by the Chamber are regulatory forbearance for banks, enhanced credit support for MSMEs and liquidity infusion measures.
FCIK also proposed sector-specific interventions, including freight and logistical support for exporters, transport subsidies for the horticulture sector and urgent rationalisation or capping of airfares to restore tourist inflow.
On the financial front, the Chamber sought a uniform interest concession on loans, enhancement of working capital limits, a moratorium on repayments, suspension of coercive recovery proceedings under the SARFAESI Act and the introduction of a transparent one-time settlement scheme.
It also recommended deferment of statutory dues, relief in power tariffs and the announcement of a power amnesty scheme for industrial and commercial consumers.
FCIK further urged the Government to immediately clear all pending payments to MSMEs, contractors and suppliers in order 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 said.
FCIK reiterated its willingness to work closely with the Government in framing and implementing appropriate policy measures to mitigate the impact of the ongoing crisis.
