On August 5, 2019, a historic moment occurred when the Indian government repealed Article 370 of the Indian Constitution, which for nearly 70 years granted special status to the Jammu and Kashmir (J&K) region. With this decision, the Indian government not only changed the framework in the region, but also paved the way for unprecedented economic reforms. The move can be seen as an attempt to encourage growth and development in J&K, which has long been mired in political uncertainty and conflict.

The repeal of Article 370 was certainly a turning point in J&K's history, giving new hope to local residents to benefit from broader development. Since then, J&K's economy has shown promising growth. Looking at data from 2018–19 to 2023–24, the state's Gross Domestic Product (GSDP) is growing  at a CAGR (Compound Annual Growth Rate) of 7.53%. This figure is an early indicator that government policies are starting to produce positive results and reflect the great potential in the development of this region.

J&K's economic growth is inseparable from a series of strategic steps taken by the Indian government. Increased investment in infrastructure, tourism, and support for the industrial sector are the main drivers of this growth. Further development programs, facilitated by incentive schemes for investors, have attracted a greater focus on foreign direct investment (FDI), which grew by 65% in the two years following the repeal of Article 370. This shows that the policy has succeeded in attracting investors, both local and international.

Tourism boom, improved connectivity, more jobs     

The tourism sector in J&K, known for its stunning natural beauty and rich cultural heritage, has undergone a major transformation. In 2023, J&K managed to bring in about 20 million domestic tourists and more than 50,000 foreign tourists. This is a figure that reflects the positive impact of intensive tourism promotion. Local communities are also beginning to feel the benefits, not only in terms of economy but also in the social field which brings cultural diversity and interaction between communities.

In an effort to improve infrastructure, the government has taken significant steps by focusing attention on improving connectivity inside and outside Jammu and Kashmir (J&K). In addition to realizing major projects such as the construction of roads, bridges, and transportation networks, this initiative aims to improve the accessibility that is much needed in the region. More than just increasing mobility, this investment also has the potential to create jobs for local residents.

Sustainable job availability is key to the growing local economy, where many residents rely on job opportunities to build a better future for themselves and their families. With an appropriate growth rate, it is hoped that this increase in connectivity can encourage more comprehensive economic development, improve people's quality of life, and attract more investment into the region.

Furthermore, investments coming to Kashmir from various sources are expected to bring much-needed infrastructure and economic growth. This is in line with the national "Make in India" initiative, which aims to strengthen local industries and create more jobs along the value chain. This investment can be seen as a strategic step taken by India to legitimize actions in Kashmir in the international arena.

Political stability can bring economic growth

In this context, the government wants to send a clear message that while political challenges and security issues are always present, economic development is a priority that cannot be ignored. If implemented with the right approach, investment in this infrastructure sector will not only strengthen the region's economic identity but also contribute to political stability by providing hope for local residents and reducing tensions in the future.

In addition to infrastructure, the agricultural sector and small and medium industries also receive significant attention. Policies that support productivity gains in these sectors give new hope to local farmers and entrepreneurs. With the push to improve agricultural techniques and provide financial support to small businesses, the government is working to create a more sustainable economic ecosystem.

To reach its full potential, policy challenges and changes must be addressed wisely. Governments must maintain an open dialogue with local communities to ensure that the changes that occur resonate with their needs and expectations. In addition, improving education and skills training for the local workforce will be vital to ensure that J&K citizens are ready to face and compete in an increasingly complex economic world.

However, despite this promising growth, challenges remain. Political stability and security at J&K are important factors to consider to maintain growth momentum. The long history of conflict and tension in the region cannot be ignored. Its success in managing these challenges will greatly determine whether or not the ongoing economic growth can continue.

The repeal of Article 370 not only changed the political map of Jammu and Kashmir, but also introduced a new wave of promising economic growth. While challenges remain, the steps taken by the Indian government to increase investment and improve infrastructure indicate great potential for J&K to become one of the hubs of economic development in India. With the right strategy, attention to political stability and sustainable development, J&K can transform into a region known not only for its natural beauty but also as a strong pillar of regional peace and prosperity. 

(The author is pursuing a Master’s degree in International Relations at Universitas Gadjah Mada, Indonesia, with a keen research focus on geopolitics and strategic studies. His academic interests include foreign policy analysis, conflict resolution, and the interplay of economic and political dynamics in South Asia. Views are personal. He can be reached at Lutfiarifulloh@mail.ugm.ac.id.)