The Jammu and Kashmir government’s identification of 6,576 stressed enterprises for possible revival has brought into focus the challenges confronting local manufacturers, including high transportation costs, market competition and disruptions caused by prolonged periods of unrest.
Chief Secretary Atal Dulloo has directed the Industries and Commerce Department to complete diagnostic profiling of the identified enterprises and prepare actionable revival plans under the MSME Health Clinic initiative.
The government’s assessment, however, does not state that the 6,576 enterprises have shut down or are all running losses. The units have been classified as “recoverable” and identified for further assessment and targeted intervention.
Separately, 106 enterprises have been categorised as “prone to chronic sickness,” a more serious classification under the exercise.
According to the government’s assessment, 3,42,261 MSMEs are registered in Jammu and Kashmir, of which 2,94,014 have been assessed. As many as 2,87,332 units, or 97.7 per cent, were classified as stable, while 6,682 enterprises were found to require active intervention.
The initiative has so far involved 581 factory visits and the preparation of 317 diagnostic reports. Thirty-four critical rehabilitation cases have also been approved by the District-Level Apex Committee (DLAC).
Industry representatives, meanwhile, have pointed to structural and policy-related challenges that they say have affected the competitiveness of local manufacturing units.
Shahid Kamili, president of the Federation Chamber of Industries Kashmir (FCIK), said the abolition of toll tax at Lakhanpur had added to the competitive pressure on industries in Jammu and Kashmir.
He said manufacturers in Kashmir face higher costs because raw materials have to be transported over long distances.
According to him, the entry of products manufactured outside Jammu and Kashmir at comparatively lower prices has made it difficult for local units to compete in the market.
Kamili also cited the impact of the lockdowns in 2016 and 2019, followed by the Covid-19 pandemic, on industrial activity in the region.
He said the removal of earlier safeguards and changes in the taxation system had further affected local manufacturers.
“Kashmir is located at the fag end of the country, and the cost of transporting raw materials is high. After the abolition of toll tax at Lakhanpur, products from outside became more competitive, putting additional pressure on local manufacturers,” Kamili said.
He said that 18 percent GST has also put additional burden on the small and medium scale enterprises.
“The government should come up with a robust industrial policy to protect local industries,” Kamili added.
Published on September 22, 2026