Industrial development is never accidental. It is the outcome of deliberate, consistent, and long-term policy vision. Economies that transformed into industrial powerhouses—Germany, Japan, South Korea, and later China—did not rely narrowly on fiscal concessions. They built enabling ecosystems anchored in robust infrastructure, industrial clustering, skills aligned with industry needs, regulatory simplicity, and institutional credibility. Entrepreneurs were granted stability, operational freedom, and confidence that rules would not shift unpredictably. Incentives existed, but only as supporting instruments within a coherent and predictable industrial strategy.

A similar pattern is evident within India. States that emerged as industrial leaders did not compete primarily on subsidies. They invested early in industrial estates, transport and logistics networks, reliable power supply, and governance systems that minimized uncertainty. Equally important was the strategic use of public procurement as a development tool. By enabling local enterprises to execute a substantial share of public infrastructure and development works, these states strengthened domestic capacity, retained capital locally, and nurtured competitive industrial champions. Complementing these measures, a national policy of imposing high customs duties on competing imports provided domestic industry essential protection during its formative years, allowing enterprises to scale up, build capabilities, and compete effectively over time.

Jammu & Kashmir, however, largely remained outside this industrial growth trajectory. Despite a strong tradition in trade, handicrafts, and horticulture, the region failed to build a robust industrial base in the decades following Independence. For nearly three decades, industrial activity remained limited and predominantly public sector–driven. As late as 1975, the State had only about 5,000 industrial units, mostly tiny and small-scale, with private entrepreneurship existing only at the margins, constrained by remoteness, fragile connectivity, inadequate infrastructure, and the absence of a coherent industrial vision.

The first formal industrial policy promoting private entrepreneurship was introduced in 1978 by the then Chief Minister, Late Sheikh Mohammad Abdullah. With periodic modifications, it remained in operation until 1995, when a new framework was introduced. After a prolonged phase of Governor’s rule, the policy was refined and re-launched in 1998 under Dr. Farooq Abdullah’s Government to address emerging economic challenges. In 2002, Prime Minister Shri Atal Bihari Vajpayee announced a Central Industrial Policy for J&K. While significant in intent and helpful in attracting fresh investment, it focused largely on new units but failed to pay attention to rehabilitating existing industries, leading to uneven growth. The simultaneous operation of State and Central policies created confusion, prompting the Mufti Mohammad Sayeed–led government to introduce a comprehensive industrial policy in 2004 that integrated both State and Central incentives under a unified framework.

These successive policies, despite good intent, suffered from weak continuity, limited institutional readiness, and inconsistent implementation. Some relied excessively on incentives without infrastructure; others launched ambitious schemes without adequate administrative or budgetary support. Rehabilitation and expansion of existing units remained peripheral, resulting in frequent policy shifts without sustained transformation. Consequently, J&K did not integrate meaningfully into India’s industrial expansion, leaving its industrial base fragile and fragmented.

The structural weaknesses were compounded by the deterioration of law and order after 1989. Prolonged instability—marked by nearly 2,500 days of business disruptions—severely disrupted production, logistics, and market access. Capital erosion, rising indebtedness, and loss of entrepreneurial confidence followed. Many otherwise viable units slipped into sickness, risk-taking declined sharply, and policy responses failed to adequately address this exceptional context.

In more recent years, structural policy changes further weakened local industry. The withdrawal of VAT exemptions following GST implementation removed a critical protective cushion for local units. Simultaneously, changes in public procurement—particularly the shift to GeM and mandatory e-procurement— marginalized enterprises lacking scale, capital, or digital readiness. The withdrawal of toll tax on imports from other states, while curtailing government resources, removed a natural cost equalizer that had supported local competitiveness.

These measures and many more left most of the units sick or marginally operational, depleting capital and causing loan defaults. The situation worsened with implementation of the SARFAESI Act in 2017, which empowered banks to take possession and auction collaterals, including ancestral properties. For small and medium entrepreneurs, financial stress turned into social and psychological distress, extinguishing appetite for reinvestment or expansion.

Over the last five to six years, the traditional developmental bond between industry and........

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