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. 2.30 trillion (US$ 27.70 billion) in 2023-24. The UT’s GSDP increased at a CAGR of 7.53% 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 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 August 2024, J&K had a total installed power-generation capacity of 3,581.99 MW, comprising 1,866.08 MW under central utilities, 1,573.67 MW (state utilities) and 142.24 MW (private utilities).

Of the total installed power-generation capacity until August 2024, 2,321.88 MW was contributed by hydropower, 881.22 MW (thermal power), 310.91 MW (renewable power) and 67.98 MW (nuclear power). 

Total exports from J&K stood at US$ 33.65 million in FY25 (Until August). Major items exported from J&K are drug formulations and biologicals, RMG wool, and manmade yarn fabrics. 

In CY24 (Until June), a record number of 1.08 crore tourists visited Jammu and Kashmir, marking an all-time high. This surge in tourism in the state was fuelled by remarkable growth following the removal of Article 370.

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

• Union Minister for Road Transport & Highways, Mr. Nitin Gadkari allocated of Rs. 1404.94 crore (US$ 169 million) for the Widening and Strengthening project of the Rafiabad – Kupwara – Chowkibal – Tangdhar – Chamkot section of National Highway-701.
• According to the Department for Promotion of Industry and Internal Trade (DPIIT), cumulative FDI inflow in J&K was valued at US$ 1.14 million between October 2019-June 2024. 
• 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.
• The Kashmir region is known for its horticulture industry. The industry plays a vital role in the UT’s economic development. In 2023-24, the total production of vegetables and fruits in the state was estimated at 1,996.18 thousand metric tonnes and 2,643.24 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