Deep Sharma
Jammu: Jammu and Kashmir’s long-awaited amendments to the Industrial Policy 2021-30 have hit another delay, with the draft failing to get a decision in the recent Cabinet meeting chaired by Chief Minister Omar Abdullah, leaving local industrialists increasingly disappointed.
Sources said the revised draft is now likely to be brought before the Cabinet again in September 2026.
If approved, it will subsequently be sent to Lieutenant Governor Manoj Sinha for final approval. This means that, even if there are no further delays, the amended industrial policy may not come into force before the end of this year.
The delay comes nearly one-and-a-half years after local industrialists began expecting changes to the existing policy following the National Conference-led government’s assurance that it would provide greater support to local entrepreneurs and protect the existing industrial base.
The government held detailed consultations with industrialists in Jammu in June, seeking their suggestions on the proposed amendments. A similar consultation was also held with the industrial sector in Kashmir.
However, the absence of a decision in the latest Cabinet meeting has added to uncertainty among existing industrial units, many of which are waiting for clarity on incentives and other policy measures.
Industrialists have sought a comprehensive logistics policy for Jammu and Kashmir, reimbursement of SGST, CGST and IGST, incentives for units undertaking expansion, and an increase in turnover incentives along with a mechanism to ensure their timely disbursement.
A major concern is the proposed restriction on freight subsidy. According to industry representatives, the government is considering extending freight subsidy only for sales made beyond 1,000 km, a move they say would benefit only a limited number of industries.
Industrialists have demanded that freight subsidy instead be extended to all interstate sales without any distance condition, arguing that otherwise nearly 98 per cent of micro and small units could remain outside its ambit.
While existing industries are waiting for the revised policy, prospective investors are also facing uncertainty over a fresh central incentive package for J&K.
The New Central Sector Scheme, announced by the Centre in 2021 to promote industrial investment in Jammu and Kashmir, provided financial incentives to investors. The scheme carried a package of ₹28,400 crore.
Following the announcement, investment proposals worth around ₹1.5 lakh crore were received in J&K, while around ₹10,500 crore was invested over four years, according to the information cited by the industry sector.
The financial allocation under the scheme was exhausted in September 2024, after which the scheme was closed. Since then, industry representatives say the pace of fresh investment has slowed amid uncertainty over a replacement package.
To sustain industrial investment, Lieutenant Governor Manoj Sinha had last year proposed increasing the Centre’s package from ₹28,400 crore to ₹75,000 crore.
However, no final announcement has yet been made by the Centre.
The issue was also discussed at an Apex Committee meeting chaired by Union Home Minister Amit Shah in July, but no final decision was taken, according to sources.
The uncertainty is reflected in the number of investment proposals awaiting clearance and incentives.
According to data from the Industries and Commerce Department, 8,306 investment applications are currently pending, involving proposed investments of around ₹1.63 lakh crore, with several investors waiting for clarity on the economic incentive package.
By December 2024, as many as 1,984 industrial units had commenced production in J&K after investments of ₹9,606.46 crore, generating employment for 63,710 people.
During 2024-25, another 334 industrial units started production following investments of ₹2,977 crore, generating 8,443 jobs.
Industry representatives say continuation of incentives for existing units is critical to preventing the local industrial base from becoming uncompetitive.
“We have already placed our suggestions before the government during the meetings. If local industry is to be protected, the government will have to continue turnover incentives and other concessions. Without these measures, it is difficult to run industries here,” said Lalit Mahajan, in-charge, MSME Council, FICCI J&K.
The proposed amendments to the Industrial Policy 2021-30 are now expected to return to the Cabinet in September, with industrialists hoping that the process will finally move towards implementation before the end of 2026.
