January 5, 1949, marked a significant event when the United Nations Commission for India and Pakistan adopted a resolution affirming the right of the people of Jammu and Kashmir to self-determination through a plebiscite. While successive Indian governments have denied Kashmiris the opportunity to determine their political future, this resolution underscored the relevance of granting them this right. Beyond political disenfranchisement, India’s policies have had profound economic repercussions on the region. By undermining Kashmir’s economic autonomy, India has sought to maintain control over its resources and industries, keeping the region politically and economically dependent.
Since the abrogation of Articles 370 and 35A in August 2019, the Indian government has aggressively promoted a narrative of progress and modernity in Jammu and Kashmir. However, this portrayal is far removed from the ground reality. Infrastructure projects like all-weather tunnels, often highlighted as signs of development, serve India’s strategic interests rather than addressing local needs. These so-called advancements seldom benefit ordinary Kashmiris, who continue to grapple with unemployment, poverty, and limited access to essential services. According to the International Labour Organization’s 2024 report, unemployment in Kashmir has reached a staggering 34.8%, the highest in its recorded history. With government job opportunities scarce and diminishing, the situation worsens. Local estimates reveal that more than 100,000 jobs were lost post-Article 370, with economic losses amounting to approximately $5.3 billion—an alarming socioeconomic decline for a population of 12.5 million.
Kashmir possesses immense potential for hydroelectric power, with the capacity to generate 20,000 megawatts. Yet, this resource remains grossly underutilised. A significant portion of the electricity produced is diverted to India via the North Grid, leaving Kashmiris to endure frequent power cuts, even during the harsh winters. Systemic neglect persists in the summer months as well, with routine load shedding disrupting daily life. Similarly, the region’s forests, rich in timber and other resources, have been exploited to meet India’s infrastructure needs, such as railway construction, while providing negligible compensation to the local population. The Kashmiri willow, used to craft cricket bats favoured by legends like Sachin Tendulkar, exemplifies the region’s untapped industrial potential—an opportunity India has deliberately ignored.
The dismantling of Kashmir’s silk industry, once a hallmark of its economic and cultural identity, further illustrates this pattern of economic suppression. The iconic silk factory in Srinagar, which once provided employment to thousands, was shut down and repurposed as government offices. Similarly, the HMT watch factory, once a thriving industrial hub, now lies defunct. Agriculture, another pillar of Kashmir’s economy, has also suffered. The influx of cheaper Iranian apples has destabilised local markets, compounding economic vulnerabilities. Efforts to establish industrial zones have largely failed due to unreliable power supplies and resource constraints.
Tourism, often hailed as Kashmir’s crown jewel, contributes only 8% to the region’s GDP and employs just over 100,000 people. Despite its global reputation as “heaven on earth,” basic infrastructure in tourist areas remains woefully inadequate. Political instability, militarisation, and state violence perpetuate cycles of job losses, further crippling the sector. Kashmir is also rich in natural resources, including plants worth millions for perfumes and medicines and precious minerals like lithium. Yet, these resources remain unutilised for local benefit. For instance, while lithium reserves existed long before August 2019, India now seeks to export them globally, leaving the region devoid of any significant advantage. Healthcare infrastructure is equally neglected. The region has only one women’s hospital, Lal Ded, and a single paediatric hospital, both relics of the Dogra era, lacking modern equipment and facilities. Such deficiencies reflect the broader neglect of essential services, further marginalising the Kashmiri people. Even infrastructure projects like all-weather routes are strategic moves by India to counter China rather than genuine efforts to improve the lives of Kashmiris.
India’s economic policies in Kashmir align with a broader strategy to undermine the region’s independence and self-governance. By systematically dismantling local industries, exploiting natural resources, and restricting key sectors like tourism and agriculture, the Indian government has perpetuated Kashmir’s economic dependence and underdevelopment. This exploitation not only violates the rights enshrined in the 1948 UN resolution but also erodes the dignity and welfare of the Kashmiri people. The post-2019 development narrative is a façade, concealing the harsh reality of marginalisation and economic exploitation. It is imperative for international and regional organisations, as well as policymakers, to confront these issues and advocate for the rights and aspirations of the Kashmiri people.
Zaman Bajwa
The Writer is Executive Director of Islamabad Think Tank YFK and a freelance contributor. He tweets @zamanbajwaa.