Jammu and Kashmir (J&K) is a Union Territory (UT) of India, located in the country’s northern part, and a global tourist destination. In addition to traditional recreational tourism, a vast scope exists for adventure, pilgrimage, spiritual, and health tourism.

The economy is primarily services based and agri-oriented. At current prices, the GSDP of J&K has been estimated at Rs. 2.31 trillion (US$ 27.95 billion) in 2023-24. The UT’s GSDP increased at a CAGR of 8.84% between 2018-19 and 2023-24.

A vast natural resource base has enabled J&K to develop land for cultivating major fruits. With varied agro-climatic conditions, the scope for horticulture is significantly high in J&K. Food processing and agro-based industries (excluding conventional grinding and extraction units) thrive in the UT. J&K has an ideal climate for floriculture and an enormous assortment of flora and fauna. J&K has Asia’s largest tulip garden.

J&K’s handicrafts are world famous and the traditional handicraft industry has emerged as a large industry. Due to its large employment base and export potential, the industry has been receiving priority attention of the government. The UT is also famous for its small-scale and cottage industries such as carpet weaving, silks, shawls, basketry, pottery, copper and silverware, papier-mâché, and walnut wood. The cottage handicrafts industry provides direct and gainful employment to around 340,000 artisans.

As of April 30, 2023, J&K had a total installed power-generation capacity of 3,516.07 MW, comprising 1,866.08 MW under central utilities, 1,543.17 MW (state utilities) and 106.82 MW (private utilities)

Total exports from J&K stood at US$ 89.77 million in FY 2022-23 (until August 2022).

The following are some of the major initiatives taken by the Government to promote Jammu & Kashmir as an investment destination:

• According to the Department for Promotion of Industry and Internal Trade (DPIIT), cumulative FDI inflow in J&K was valued at US$07 million between October 2019-March 2023.
• Under the State Budget 2023-24, Rs. 2,928.04 crore (US$ 357.4 million) has been allocated for housing and urban development.
• Raw silk production stood at 98 MT in FY 2021-22 in Jammu & Kashmir
• In FY 2021-22, exports of drug formulations and biologicals from the union territory stood at US$ 48.18 million, which accounted for 24.2% of the total exports.
• Total tourist arrivals to the UT reached 113.16 million in 2021
• In 2021-22, total production of horticulture crops in the UT is expected to be 3,580.82 thousand metric tonnes. In 2021-22, the total production of vegetables and fruits in the state was estimated at 1,338.27 thousand metric tonnes and 2,237.87 thousand metric tonnes, respectively.
• In March 2022, the UAE pledged to invest Rs. 3,000 crore (US$ 391.8 million) in J&K.
• J&K has an industrial policy that offers attractive incentives along with a single-window clearance mechanism. Land is allotted at concessional rates in industrial areas on lease for 90 years.
• National Highway Infrastructure Development Corporation (NHIDCL) is developing five tunnels in the UT at a cost of US$ 3.42 million. The tunnels will have all weather access and will be completed by 2024.
• In FY23, 543 new projects with a total cost of Rs. 2,237 crore (US$ 292.2 million) will be sanctioned with NABARD funding.
• An elevated light metro rail system is expected to be rolled out in 2022-23 and is likely to be completed in 2026. This will reduce the traffic congestion in Srinagar & Jammu.
• In April 2021, the government of Jammu & Kashmir signed 456 memoranda of understanding (MOUs) with various firms for a potential investment worth Rs. 23,152 crore (US$ 3.17 billion).
• In February 2021, Prime Minister Mr. Narendra Modi inaugurated the second Khelo India Winter Games in Gulmarg with the objective of making Jammu and Kashmir a hub for winter sports.
• In October 2020, construction work has started on the Zozila Tunnel at J&K. The tunnel will provide all-weather connectivity on NH-1 between Srinagar Valley and Leh (Ladakh Plateau) and will bring about an all-round Jammu & Kashmir economic and sociocultural integration (UTs of J&K and Ladakh). It involves building a 14.15-km long tunnel under the Zojila pass on NH-1, linking Srinagar and Leh via Dras & Kargil.

Note: P - Provisional, T - Target, MT - Million Tonnes, * Including Ladakh Union Territory