Over 700 MSMEs Shut Down in IIOJK Amid Economic Struggles

Over 700 MSMEs have shut down in IIOJK in the past four years, highlighting the region’s industrial struggles amid financial pressures and government challenges.

Indian Illegally Occupied Jammu and Kashmir’s (IIOJK) industrial sector has faced a severe setback, with more than 700 Micro, Small, and Medium Enterprises (MSMEs) ceasing operations in the past four years. According to Union Minister of Commerce and Industry, Piyush Goyal, 701 industrial units shut down between July 1, 2020, and November 15, 2024, including 697 micro-enterprises and four small-scale units.

This closure in IIOJK is part of a wider national trend, where a total of 61,469 industrial units, including 60,909 micro and 507 small enterprises, have been forced to close during the same period. The closures reflect broader challenges within India’s MSME sector, which has struggled with financial instability, debt, and economic pressure.

The shutdowns have left many local businesses facing mounting debt, with some forced to auction their industrial estates. These closures underscore the need for a more sustainable and supportive industrial framework. Local industrialists argue that while the government is focused on attracting new investments, it is equally critical to support and sustain the existing industrial units.

Industrial stakeholders in IIOJK are calling for a comprehensive review of the region’s industrial policies. They advocate for a balanced approach to development that includes both attracting fresh investment and providing adequate support to struggling businesses. The lack of such support has been a key factor behind the closures, with many MSMEs unable to repay loans, which worsened during the economic slowdown.

Despite the challenges, the government has taken some steps to address these issues. In its response, the government emphasized that industrial development primarily falls under the jurisdiction of state governments. Additionally, the government has introduced financial assistance schemes to support MSMEs.

The Emergency Credit Line Guarantee Scheme (ECLGS), launched under the Aatmanirbhar Bharat Abhiyaan during the COVID-19 pandemic, helped MSMEs manage their operational liabilities. While the scheme ended on March 31, 2023.

The closure of over 700 MSMEs in IIOJK highlights the region’s economic vulnerabilities. While government initiatives are deficient to address these issues, extra support is needed to ensure the survival of local businesses and foster sustainable industrial growth. In IIOJK