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The April 22 terrorist attack in Pahalgam may not only dampen record tourist inflows into Jammu & Kashmir (J&K) but also dent its rising tide of investments, with fresh planned outlays clocking their highest ever tally in 2024-25. The value of new investment projects in J&K hit ₹31,644 crore in FY25, a 328.4 per cent year-on- year rise, according to data compiled for Business Standard by Projects Today, which tracks new and ongoing investment projects in India since 2000.
This marked the second-highest jump across states in a year that saw overall new investment plans in the country rise by 25.35 per cent to ₹44.15 trillion. This included an unprecedented ₹10,000 crore-plus outlay for manufacturing projects in the Union Territory of J&K.
Notably, there has been a sharp surge in the share of private investments planned in J&K. Over the past four years, private investors accounted for 42.2 per cent of nearly ₹70,000 crore in fresh outlays announced. To put that in context, private players accounted for less than 5 per cent of all investments in J&K in five of the seven years between FY15 and FY21, and breached the 10 per cent mark only twice.
The Srinagar Development Authority’s ₹15,000 crore satellite township project in Bemina was J&K’s largest project in FY25. However, the next three largest investments are from private players — a ₹2,246 crore clinker grinding project by Ambuja Concrete North, a ₹1,616 crore beverages plant by Ceylon Beverages Can, and a ₹1,281 crore solar cells and modules project by Rays Green Energy Manufacturing.
“Since FY22, private investment in the region has been steadily increasing, which is a positive development for the region. Kashmir is expected to continue drawing more investment in the years ahead. Heinous incidents like the one in Pahalgam may create hiccups in the short term, but they are unlikely to disrupt this upward trend in investment,” said Shashikant Hegde, director and CEO of Projects Today.
“The government, on its part, should continue its investments in roadways, railways, inland waterways, and industrial parks,” he said, stressing that J&K holds significant potential to attract investments in the tourism and real estate sectors. In 2024-25, infrastructure investments worth over ₹21,000 crore were announced, including projects planned by the private sector.
Some economists are not as sanguine. “This devastating event did not just sound a death knell to tourism but also dealt a body blow to the overall environment of safety, security, and investor confidence,” remarked Manoranjan Sharma, chief economist at Infomerics Valuation and Ratings.
Sharma said the Pahalgam attack could hurt income, output, and employment across the region’s key sectors, including tourism, retail, and handicrafts. J&K’s gross state domestic product (GSDP) was expected to rise by 7.06 per cent in FY25, outpacing the estimated 6.5 per cent national GDP growth.
An industry representative in J&K, requesting anonymity, said that private investors may review ongoing projects and plans, and hold back on fresh commitments for now. Moreover, the implementation rate of investment projects planned in the state needs a deeper review, as many investors from outside the state often back out in the face of challenges like power and road connectivity in some industrial enclaves.
J&K was ranked 17th among states in terms of the value of investment projects in FY25, but received a bulk of its investments in the July-September 2024 quarter, when it managed to attain the 10th position across states with fresh projects worth about ₹18,400 crore.
Overall, the 150 investment announcements in J&K in FY25 were worth over a third of the ₹92,000-odd crore worth of projects initiated in the decade from FY15 to FY24.
