J&K startups hope for internet friendly environment post elections

With the first round of Assembly elections in the Union Territory of Jammu and Kashmir just concluded, the air in Srinagar’s Lal Chowk is buzzing with political discussions. While most chatter revolves around the second phase of elections on September 25 and the candidates, for a smaller group of shopkeepers, a more pressing matter is the impact of frequent internet shutdowns on the region’s small businesses and startups.

“After GST and demonetisation, internet shutdown has been the third hammer blow to small businesses,” one shopkeeper remarks. “In this digital age, we’ve lost countless customers due to connectivity issues. During winter, when tourist numbers dwindle, we rely on online demand and deliveries, but even that often hangs in limbo when the internet is down.”

For years, Jammu and Kashmir has faced a high number of internet blackouts, and the region’s startups have borne the brunt of such disruptions. “Internet connectivity is the lifeblood of a startup, and its frequent suspension has posed immense challenges,” says Ishan Verma, president of the J&K Startup Association. “Prior to 2019 due to the then prevailing law and order situation, startups faced significant hurdles in operating without reliable internet, as most rely heavily on technology or digital platforms.”

While a Supreme Court ruling in January 2020 curtailed the length of shutdowns, the fallout continues to reverberate through the entrepreneurial landscape. According to the internet monitoring site Internet Shutdowns, the region experienced 43 instances of such blockades in 2022, a number that dipped to 10 in 2023.

The impact of internet shutdowns on startups and smaller businesses extends beyond operational disruptions. Startups and e-commerce are the result of mass internet adoption and globalisation, explains Saad Tramboo of Tramboo Sport, an online seller of Kashmir willow bats. “Without a stable internet connection, these sectors become non-existent.”

“The objective of a startup is to address problems, often at the expense of high profit, and e-commerce exists solely for online trade… If an entrepreneur invests heavily in building an e-commerce platform, only to find it cut off from the world due to internet restrictions, what is he expected to do? The only option may be to shutter the business and do something else,” Tramboo laments.

The agricultural sector, a vital component of Kashmir’s economy, has also been adversely affected by internet shutdowns. The Valley’s ~15,000 crore apple industry produces 80 per cent of India’s apples and employs 700,000 families. “The sector is constantly innovating and reinventing. But frequent internet shutdowns disrupt operations, communications, and scaling efforts. The losses are significant,” says Ubair Shah, founder of agritech firm Efruitmandi.

While some startups have adapted to such challenges, the costs have been significant. “Many founders considered relocating to cities like Bengaluru or Hyderabad, but they realised that migration was not a long-term solution,” says Verma, adding, instead, they joined forces to advocate for government support and a conducive startup ecosystem that would enable local entrepreneurs to thrive.

Ridhima Arora, founder and CEO of Jammu-based Namhya Foods, shares her strategy of adapting operations to cope with the instability.

“For a direct-to-consumer brand like ours, internet access is crucial. Political disturbances affect businesses in a lot more ways than we can imagine. We’ve relied on two key factors: An ancillary team that sits in Delhi and the fact that our focus is on manufacturing rather than services,” she explains.

But for entrepreneurs like Saad, the situation can be dire. “With internet shutdowns, business ground to a halt… In the past, communication channels vanished and we lost contact with our team, suppliers, and customers,” he recalls.

As the next round of elections approaches, a glimmer of hope emerges for these startups. Data from Tracxn shows that Jammu and Kashmir has one of the lowest numbers of startups in the country. Compared to other regions, the funding available to these fledgling companies is scant.

For entrepreneurs like Shah, these elections could herald a shift toward more favourable policies with local representatives expected to better address business challenges. “The previous startup policy faltered amid political upheaval, but we’re hopeful that the new Jammu and Kashmir Startup Policy 2024-27 will foster a stronger ecosystem for scaling businesses,” he says.

“The dynamics have shifted since the abrogation of Article 370. With these elections, I hope for a government that acts independently, as alliances significantly affect policy execution and vision. This electoral process offers us renewed hope,” Arora concludes.