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FCIK seeks urgent policy intervention to address economic fallout of West Asian Conflict

  • RK News By RK News
  • Comments 0
  • 06 Apr 2026

 

 

Srinagar, Apr 05: The Federation of Chambers of Industries Kashmir (FCIK) has expressed serious concern over the growing economic distress in Jammu & Kashmir arising from the ongoing West Asian conflict, and has urged the Government to immediately step in with a comprehensive relief and stabilization package to safeguard the region’s fragile industrial ecosystem.

 

In a communication addressed to the Commissioner/Secretary, Industries & Commerce Department, FCIK stated that over five weeks into the conflict, its cascading effects are now being felt across all sectors of the local economy.

 

What initially appeared as a distant geopolitical development has rapidly translated into a direct economic disruption, with businesses facing rising input costs, disrupted supply chains, delayed receivables, and an acute liquidity crunch.

 

Highlighting sector-specific impacts, FCIK noted that the export sector, particularly Kashmir’s handicrafts, has been severely affected, with consignments stalled at various stages and payments from overseas buyers either delayed or deferred. This has significantly slowed remittance inflows and disrupted production cycles, impacting artisans and exporters alike.

 

The horticulture sector is also under strain due to escalating transportation costs driven by rising fuel prices, which have eroded margins and affected the competitiveness of perishable produce in national markets.

 

The Chamber further observed that the tourism sector is beginning to experience the fallout, with rising airfares and prevailing uncertainties leading to cancellations and weakening forward bookings.

 

In addition, disruptions in remittance flows from the Gulf region have compounded the situation, affecting the incomes of numerous households and, in turn, local consumption patterns.

 

FCIK emphasized that the cumulative impact of these developments is now clearly visible on MSMEs, which are already operating under constrained conditions and are struggling to meet operational expenses, service existing debt, and sustain employment levels.

 

Describing the situation as an “economic exigency,” FCIK has called upon the Government to initiate immediate measures in coordination with the Government of India and the Reserve Bank of India. These include regulatory forbearance for banks, enhanced credit support for MSMEs, and liquidity infusion measures.

 

The Chamber has also proposed sector-specific interventions such as freight and logistical support for exporters, transport subsidies for the horticulture sector, and urgent rationalization or capping of airfares to restore tourist inflow.

 

On the financial front, FCIK has sought a uniform interest concession on loans, enhancement of working capital limits, moratorium on repayments, suspension of coercive recovery actions under the SARFAESI Act, and the introduction of a transparent One-Time Settlement scheme.

 

It has also recommended deferment of statutory dues, relief in power tariffs, and the announcement of a power amnesty scheme for industrial and commercial consumers.

 

Further, FCIK has stressed the need for immediate clearance of all pending government payments to MSMEs, contractors, and suppliers to inject much-needed liquidity into the economy.

 

“The present crisis is external and beyond the control of local enterprises. Without timely and decisive intervention, there is a real risk of widespread financial distress, business closures, and significant job losses,” the Chamber cautioned.

 

FCIK reiterated its willingness to work closely with the Government in designing and implementing appropriate policy responses to mitigate the adverse impact of the ongoing crisis.

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