Business Losses Cross Rs 5,000 Crore in 2 Months, Says Kashmir Chamber

Srinagar: Business and commerce is suffering one of the worst phases in Kashmir’s history, say trade leaders, as the ongoing crisis following the clampdown and communication blockade continues to cripple business leading to economic losses across sectors. 

The losses, as per the estimates of Kashmir Chamber of Commerce & Industries (KCCI), have crossed over Rs 5,000 crore in the past two months after the Centre imposed restrictions on August 5, in the wake of abrogation of Articles 370 and 35A and bifurcated Jammu and Kashmir into two Union territories. 

Apart from losses, the crackdown on several business leaders has left the entire business fraternity shocked, say some traders, demanding immediate release of the incarcerated businessmen in the vVlley.

Sheikh Feroz, who runs Haj and Umrah services business, says he has lost all peak-time business due to the current crisis and the internet shutdown. 

“People preferred the late autumn and winter season for performing Umrah and we had already pre-booked 2,000 people for the travel. But, due to the clampdown, no booking has been confirmed,” he says. 

Each Umrah service booking in Kashmir-based travel firms costs between Rs 75,000-Rs 1.25 lakh. Most of the bookings, according to Feroz, are made between August and October. “The average number of booking in this period is about 35,000,” he said. 

The hospitality sector in Kashmir, according to KCCI, is a Rs 5,000 crore industry, and is one of the main sectors that has been badly hit after the government issued a notification for all tourists to leave Kashmir a few days before it abrogated Article 370 on August 5. 

At present, there are about 1,300 hotels, 900 houseboats and 650 shikara boats in Kashmir, that are lying vacant without work. The losses in the tourism sector have crossed over Rs 1,500 crore, says KCCI.

Sheikh Ashiq, president of KCCI, told NewsClick that the overall business losses incurred during the current crisis will increase as the turmoil and communication blockade is continues without any respite. “It is difficult to assess the total loss as the situation has not improved even after two months. The impact and damages will be higher as time goes by,” he says.

Traders in Kashmir say business has always been one of the main victims of the conflict and violence. What has increased their troubles, traders say, is the “politicisation of trade” by the government.

“The government created further problems for traders, especially in the general trade, by posing trade as antithetical to the crisis and as an indicator of normalcy in Kashmir,” Ashiq says.

Currently, about 70,000 shops across Kashmir are closed due to the lockdown and almost all of the shops in the commercial hub of Lal Chowk in Srinagar are closed. There is, however, a flea market, called the ‘Sunday Market’ because it functions only on Sunday, operating in the area on all days, which, traders in Lal Chowk allege has been set up to give a semblance of ‘return of normalcy’ in the Valley.

The apple industry, the main contributors to the gross domestic product of J&K, is facing massive losses due to the clampdown and subsequent threat from militant groups. The crisis in the horticulture industry worth Rs 8,000 crore has affected not just the traders in Kashmir but also those from Jammu and elsewhere who have invested hundreds of crores in the sector.

Losses incurred by transport services are estimated at Rs 500 crore in the past two months. 

Another major sector, handicrafts, which contributes 2% to the total economy of J&K and is worth Rs 2,000 crore, is almost at a standstill and is faced with bigger challenges ahead. 

“The export produce in handicrafts increases ahead of Christmas and New Year’s Eve every year. Most of the export orders, like Kashmiri shawls and carpets, the hallmark of export products from Kashmir, are booked during this season. But owing to the communication blockade, handicraft traders have lost a major share in business this year,” Ashiq adds. 

The KCCI puts the average business loss of the handicraft industry at Rs 100 crore per day since August 5.     

Ashiq says there is no information about how many businessmen and traders have been detained across Kashmir in the past two months. The arrest of trade leaders like Mubeen Shah, Shakeel Qalandar and Yasin Khan have led to fear and uncertainty among the entire business fraternity.

According to Feroz, many travel agencies in Kashmir are faced with getting their names blacklisted in the International Air Transport Association, as they could not renew their membership. Many traders with KCCI also face problems as they could not submit their goods and services tax and income tax returns since the past two months. “Some of them could travel outside J&K to file these documents, but many others couldn’t,” Ashiq adds.