In 2002, U.S Defense Secretary Donald Rumsfeld during a press briefing in Pakistan said that “money is a coward”, suggesting that investments gravitate towards safe and stable places.

The statement holds true in the context of Kashmir Valley, where the fragile security situation has often discouraged businessmen and big corporate houses to invest in the region. 

Although the security situation in Kashmir appeared to have improved significantly post 2019, the recent attacks again laid bare the tenuous nature of this peace. 

At least 9 civilians suffered injuries when militants threw a grenade on Sunday afternoon near the Tourist Reception Centre in Srinagar. The area usually teems with shoppers, particularly on Sundays, as a flea market is set up there.

The attack came close on the heels of a fire-fight between security forces and terrorists in Srinagar’s Khanyar area, resulting in the death of a Pakistan based terrorist and injuries to 4 security personnel. In a sperate gunbattle in Anantnag district, some 75 kms south of Srinagar, security forces shot dead two terrorists. 

Earlier, eight migrant workers and a local doctor were killed by terrorists in twin terror attacks in central and south Kashmir. 

While the recent incidents, particularly in Srinagar city, have blindsided both the security establishment and newly elected government alike, they may cast a long shadow over the future investments in the Valley. 

In 2021, the Jammu and Kashmir government rolled out a new industrial policy, which allowed investments from outside. According to the government, the Union Territory received proposals valued at ₹84,544 crore in over 40 industrial sectors by December 2023.

In March, 2023, LG Manoj Sinha laid the foundation stone of a mega mall in Sempora, Pampore, being built by Emaar, a Dubai based real estate developer. The company planned to invest Rs 250 crore to build the Mall. Emaar’s initiative marked the first Foreign Direct Investment (FDI) in the region. 

Shahid Kamili, a renowned industrialist and president of Federation Chamber of Industries, (Kashmir) said that peace and stability were crucial elements for the business. 

“Peace is fundamental for promoting economic growth and attracting investors”, he said. Kamili, however, refused to comment whether the recent incidents could deter the investors from investing in Kashmir. 

Shahnawaz Hussain, a political analyst said that the presence of conflict inherently deters private investment, leaving little or no scope for the private sector to flourish in a conflict-scarred area.  

Political concerns

The Khanyar fire-fight was the first of its kind since 2022. Concerns are mounting over the sudden spike of violence after a representative government took over the reins of Jammu and Kashmir, particular as security issues continue to be the subject of Lieutenant Governor.  

Former Chief Minister and National Conference Chief Minister Dr Farooq Abdullah called for an investigation into the recent terror attacks to see whether they were part of an attempt to undermine the recently elected government headed by Omar Abdullah. 

Senior CPI(M) leader Mohammed Yousuf Tarigami told businessline that it was crucial to take the elected representatives into confidence to restore peace in the region. 

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