For industrial entrepreneurs in Jammu and Kashmir, a new policy is being judged against two different futures. One is the investment the government hopes to attract. The other is the existing factory that has reduced production, accumulated liabilities or stopped operating. Industry representatives say a framework that addresses only the first will leave much of the sector’s immediate distress untouched.
The proposed New Industrial Policy has therefore become a test of whether the government can combine investment promotion with industrial rehabilitation. Business chambers are seeking easier access to credit, preference for local manufacturers in public procurement, relief for financially stressed units, better infrastructure and more predictable rules. Their expectations have gathered momentum after Chief Minister Omar Abdullah assured industry representatives that the final draft would be shared with them for suggestions before its unveiling.
The government has constituted a three-member drafting committee under Additional Chief Secretary, Finance, Shailender Kumar. Its other members are Commissioner Secretary, Industries and Commerce, Vikramjeet Singh, and J&K Bank Managing Director and Chief Executive Amitava Chatterjee. The Federation of Chambers of Industries Kashmir, the Kashmir Chamber of Industries and Commerce and other organisations have held consultations and submitted representations.
Their demands reflect the constraints faced by businesses that operate in a region where market access, finance, transport costs and regulatory processes can shape the viability of a unit. Industry representatives argue that existing arrangements have not adequately addressed the financial and operational difficulties of local manufacturers, particularly those carrying liabilities accumulated during prolonged disruptions.
One central demand is a clear preference for locally manufactured goods in government procurement. Manufacturers say local units may have production capacity but struggle to compete for public orders because of tender conditions or procurement arrangements that favour larger suppliers. A transparent preference, they argue, could give businesses a dependable market, improve capacity utilisation and keep a greater share of public expenditure within the region.
Such a measure would need careful design. Procurement preference cannot mean abandoning quality, competition or value for public money. It would require clear definitions of local manufacture, transparent eligibility, fair tender conditions and timely payment. Without those safeguards, preference could become a source of discretion rather than a predictable instrument for industrial growth.
The second major demand concerns sick and financially stressed units. Industry representatives say that accumulated debt, reduced working capital and outstanding government dues have pushed otherwise viable enterprises towards closure. They want a structured rehabilitation framework that could include financial restructuring, restoration of working capital and settlement mechanisms for eligible electricity arrears, industrial estate ground rent and other statutory liabilities.
The proposed One Time Settlement scheme from J&K Bank is closely linked to that expectation. Industry representatives say the bank’s management had indicated that an OTS initiative would be introduced in conjunction with the policy. They have sought terms comparable to the State Bank of India’s OTS-20 scheme, particularly for eligible stressed accounts up to Rs 50 crore. The final terms, eligibility and timeline, however, remain for the bank to establish formally.
The policy debate is also unfolding alongside the Jammu and Kashmir Ease of Doing Business Act, 2026, which is intended to simplify regulatory procedures, remove redundant clearances and reduce administrative discretion. Industry chambers have welcomed the legislation but are waiting for rules and operational guidelines. Their concern is that an act can promise simplification while businesses continue to encounter delays in everyday approvals unless departments are held to transparent and time-bound procedures.
A credible policy must also consider infrastructure and technological modernisation. Industrial units need reliable power, roads, industrial-estate services and access to modern equipment. Incentives may encourage investment, but the ability to produce competitively depends on the quality and cost of these basic inputs. Smaller manufacturers may also need technical assistance to upgrade processes and meet changing market standards.
The employment stakes are considerable. A stronger industrial base could create jobs for educated and skilled young people, deepen local supply chains and support entrepreneurship. But those gains will not come simply from announcing incentives. They depend on whether new units become operational, existing ones recover and manufacturers can sell what they produce.
The government’s consultative approach has allowed industry bodies to place their demands before the drafting committee. The next test is whether the final policy sets out measurable commitments: who will administer relief, how eligible units will be assessed, how procurement preference will work, what timelines will govern clearances and how the impact will be reviewed.
For entrepreneurs, the policy is not an abstract document. It may determine whether a unit can restart production, whether a bank will consider fresh credit and whether a local manufacturer can compete for a public contract. The challenge for the government is to balance the attraction of new investment with the rehabilitation of businesses already rooted in the region.
A policy that promises both will need more than a list of incentives. It will need clear rules, credible financing arrangements and institutions capable of delivering decisions on time. The hope among industry representatives is that the new framework will turn long-standing demands into a practical programme. Whether it does so will be measured not by the day it is announced, but by the factories that return to work and the jobs that follow.
About the Author
Moien Darial writes with the precision of an analyst and sensitivity of a storyteller, exploring global economic shifts and emerging technologies.
