New Delhi: Companies rushed to set up new businesses in J&K in the past five years, with the tally of operational entities in the union territory surging nearly threefold during the period, coinciding with the abrogation of its special status. Experts, however, say the Pahalgam attack and fears of an India-Pakistan war could hurt investor sentiment in the short term.
J&K housed 8,168 'active' or operational firms as of March 2025, up from 3,293 as of March 2020, and 2,318 as of March 2015, showed latest corporate affairs ministry data.
Long-term Biz Prospects Intact
It currently accounts for the second-highest number of operational companies among hilly states and UTs in India, barring Uttarakhand with 12,946 companies.
Despite the latest concerns over J&K's investment climate in the short term, central government officials reckon that the region's strong long-term growth prospects - which had attracted several companies so far - remain intact and will continue to drive economic activity. The Pahalgam attack claimed 26 lives, stoking widespread anger in India. The Modi government has blamed Pakistan for the latter's continuous support to spreading terror activities in India. Officials said a sustained development push by the Centre, drop in overall terror incidents since the 2019 repeal of Article 370 despite the latest attack, new incentive schemes, and heightened efforts by local authorities to address businesses' concerns have lured investors into J&K in recent years. To be sure, the number of fresh company incorporations in J&K fell to 1,380 in FY25 from 1,433 the year before, and a record 1,756 in FY23.
A senior official, however, attributed the moderation to the unusual surge in FY23, terming the current scenario as a phase of "normalisation". "The FY25 numbers are still well above the historical trend," the official emphasised. The government arrives at the number of "active" companies after excluding those already closed or facing liquidation or under the process of getting their names deregistered from those incorporated. J&K currently extends a range of incentives to companies to set up shop there. These include capital investment support, interest subvention on working capital loans, and incentives linked to the goods and services tax (GST).
J&K housed 8,168 'active' or operational firms as of March 2025, up from 3,293 as of March 2020, and 2,318 as of March 2015, showed latest corporate affairs ministry data.
Long-term Biz Prospects Intact
It currently accounts for the second-highest number of operational companies among hilly states and UTs in India, barring Uttarakhand with 12,946 companies.
Despite the latest concerns over J&K's investment climate in the short term, central government officials reckon that the region's strong long-term growth prospects - which had attracted several companies so far - remain intact and will continue to drive economic activity. The Pahalgam attack claimed 26 lives, stoking widespread anger in India. The Modi government has blamed Pakistan for the latter's continuous support to spreading terror activities in India. Officials said a sustained development push by the Centre, drop in overall terror incidents since the 2019 repeal of Article 370 despite the latest attack, new incentive schemes, and heightened efforts by local authorities to address businesses' concerns have lured investors into J&K in recent years. To be sure, the number of fresh company incorporations in J&K fell to 1,380 in FY25 from 1,433 the year before, and a record 1,756 in FY23.
A senior official, however, attributed the moderation to the unusual surge in FY23, terming the current scenario as a phase of "normalisation". "The FY25 numbers are still well above the historical trend," the official emphasised. The government arrives at the number of "active" companies after excluding those already closed or facing liquidation or under the process of getting their names deregistered from those incorporated. J&K currently extends a range of incentives to companies to set up shop there. These include capital investment support, interest subvention on working capital loans, and incentives linked to the goods and services tax (GST).
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