Kashmir now attracting serious investment; JSW Group leads the way

New Delhi: Indian companies are beginning to make forays into Jammu and Kashmir, driving a revival of construction, tourism, and entertainment four years after the abrogation of Article 370.

The Financial Times reported that New Delhi has been quietly pressing companies to invest in Kashmir since revoking the state’s special autonomous status in 2019, part of a campaign to bring the region to heel following a decades-long separatist conflict. As the unrest has abated — with dissidents silenced or imprisoned — some businesses are now heeding the government’s call.

Sajjan Jindal, the billionaire industrialist and chair of conglomerate JSW Group, is investing $20mn-$25mn in a new steel facility in Pulwama, outside Srinagar, the capital, which is due to open in March. The move made “business sense”, he said — but he also cited patriotic duty.

“We wanted to also support the government’s initiative of industrializing the J&K area,” Jindal told the Financial Times, using an abbreviation for the territory. “As a patriotic Indian, I feel that it’s my responsibility.”

“We have to do things to normalize the situation in Kashmir,” Jindal said, so that “business becomes more important over territorial disputes”.

The region has long had a successful agriculture sector and a niche in high-end handicrafts but has struggled to build a viable industrial base in the Kashmir valley, in part because of the conflict. The unemployment rate was 23 percent in March, the third-highest in the country, according to the Centre for Monitoring Indian Economy.

This year, the announcement of lithium reserves in Jammu raised hopes of capitalizing on a surge in demand for the mineral used in electric vehicle and laptop batteries, though some geologists have voiced doubts about the size and accessibility of the deposit.

Tour groups, mostly Indian, have resumed taking boat rides on Srinagar’s picturesque Dal Lake or riding ski lifts in Gulmarg, and JSW’s charitable foundation is working with the regional government to restore Mughal-era gardens, a heritage site and tourist draw.

Bollywood producers have resumed shooting in some of India’s most scenic locations, drawn by subsidies from the central government that cover up to 25 percent of production costs.

 “Broadly speaking, the violence has been contained by a very strong security force,” said Ajai Sahni, director of the Institute for Conflict Management in New Delhi. Fatalities from the conflict had declined from a peak of more than 4,000 in 2001 to 253 in 2022, Sahni said.

But another consequence is the return of nightlife, once unthinkable during the decades of strife, when militants would declare hartals — enforced shutdowns or strikes — that businesspeople said blurred the lines between political action and economic coercion. Gaming arcades now operate in Srinagar and at least two Indian companies have opened cinemas since last year.

“We are investing in J&K to bring cinema back,” said Kanika Singal, co-founder of Jadooz, an education and entertainment start-up that has opened four screens in the territory, with three more under construction.

“Industry has started reviving, and we see a lot of interest,” said Vikramjit Singh, commissioner with Jammu and Kashmir’s Department of Industries, adding that investors had put down deposits for land in industrial estates in projects with envisaged investment worth about Rs14.9bn ($181mn) since the territory introduced a new industrial policy in 2021.

At the JSW site in Pulwama, steel girders marked the plant where workers will coat steel for roofing materials, in brisk demand as construction accelerates.

In the past, Jindal said, “nobody would go” to Kashmir for business. “Now the environment is much better.

“There is peace,” he said. “The Kashmiris are welcoming investments.” 

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