Road Freight Subsidy For J&K: Exporters Seek Centre’s Support

J&K has huge potential for exports. Geographical disadvantage adds to the costs for exporters. The Federation of Industries Jammu has requested financial support from the Centre to reimburse road freight for goods transport from J&K up to nearest ports.

Swati Dayal
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Kashmir Rad

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The micro, small and medium enterprises (MSMEs) from Jammu & Kashmir have urged the central government to introduce road freight subsidy for the industry in order to boost exports from the region. The subsidy, they say, will make the products from the land-locked territory more competitive in the international market.

FOIJ Looks Upto Centre For Financial Support To Boost Exports

The Federation of Industries Jammu (FOIJ) has requested Prime Minister Narendra Modi and Union Commerce & Industry Minister Piyush Goyal to provide financial support to J&K  to reimburse road freight to transport goods from Jammu & Kashmir up to the nearest ports.

Lalit Mahajan, Chairman, FOIJ said the aim is to encourage the export of industrial goods to other countries.

Geographical Disadvantage Resulting in Costly Imports & Exports

In the backdrop of country achieving record goods and services exports this year, the Federation has sought attention of the government towards “limited growth in the export of industrial goods to other countries”. FOIJ highlighted that the exports from J&K amounted to only USD 17.30 crores up to January, 2023.

Jammu and Kashmir is at the far end of the country and face additional cost of production and transportation for sending finished goods by road to nearest port due to non-availability of Inland Container Depot or ports in the Union Territory. Meanwhile, two dry ports are coming up in the Union Territory, one in Katra and the second in Samba district.

Mahajan said, “Additional freight being paid on the import of raw materials and the export of finished goods by road up to ports is a major hindrance to the growth of the  industrial sector in Jammu & Kashmir. The manufacturing units located near the ports are posing stiff competition due to locational advantages, while the hostile borders with China and Pakistan have added to the challenge.”

Centre’s Support Critical For Exporters To Compete Globally

The MSMEs from the regions have emphasized that there is a lot of scope for the export of goods from the Union Territory of Jammu & Kashmir to other countries.

“However, without financial support for the reimbursement of road freight up to the nearest ports, the unit holders are unable to compete in the international market,” Mahajan added.

FOIJ has thus called for the provision of road freight incentives under the Incentivizing Export through Make in India, Make for World Scheme.

All About J&K Exports

Jammu and Kashmir is known for its handicrafts, particularly its carpets, shawls, and woodcarvings. The UT is also a major producer of saffron, and the spice is one of its major exports. Other exports include fruits and vegetables, particularly apples and cherries, as well as medicinal herbs and honey.

According to data from the Ministry of Commerce and Industry, the total exports from Jammu and Kashmir in 2019-20 were worth approximately $141 million. This represented a decline of around 5.5% from the previous year. The main markets for the state's exports were the United Arab Emirates, Saudi Arabia, and the United States.

In recent years, the Jammu and Kashmir government has been making efforts to boost the UT's export sector. Total exports from J&K stood at USD 89.77 million in FY 2022-23 (until August 2022).