Starting a Small Business in Jammu and Kashmir: Land Rules, the Industrial Scheme, Crafts, Saffron and Tourism

Jammu and Kashmir, a union territory since 2019, is famous for Pashmina shawls, saffron, walnuts and apples, papier-mâché and carpets, and tourism in Srinagar, Gulmarg and Pahalgam, while Jammu and Katra serve pilgrims to Mata Vaishno Devi. Trade and services businesses earn above the national average.

This guide brings together what’s specific to Jammu and Kashmir: what government data shows about small businesses in the state, the registrations and state rules you’ll deal with, the support available, and notes on its main cities. For the national rules that apply everywhere, follow the links to our detailed guides.

Key points

• Jammu and Kashmir had about 7 lakh small unincorporated businesses in 2023-24, with trade and services businesses adding more than the national average.
• Establishments register under the Jammu and Kashmir Shops and Establishments Act, 1966.
• Land rules changed in 2020: people from outside J&K can buy non-agricultural land, while agricultural land remains largely restricted to agriculturists.
• The New Central Sector Scheme for industrial development of J&K offers incentives for new units and expansions; check current terms.
• Jammu and Kashmir uses the standard ₹40 lakh GST threshold for goods.

Small businesses in Jammu and Kashmir: the numbers

MoSPI’s Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2023-24 counted about 7.0 lakh small unincorporated non-farm establishments in Jammu and Kashmir, in manufacturing, trade and other services.

Compared with India as a whole, in manufacturing, the average business added ₹1,26,833 of value a year, about 33% below the all-India average of ₹1,88,790; in trade, the average business added ₹3,14,628 of value a year, close to the all-India average of ₹2,73,779; in services, the average business added ₹2,84,915 of value a year, close to the all-India average of ₹2,62,239. Value added is what a business earns from sales minus the cost of materials, stock and other inputs, before wages and the owner’s pay.

Trade and services businesses in J&K add more value than the national average, while manufacturing is below. Handicrafts and horticulture support many households, and tourism and pilgrimage are major sources of income.

Urban or rural?

Location within Jammu and Kashmir makes a big difference. Average value added per business by area: manufacturing, ₹2,19,734 urban against ₹98,553 rural (2.2 times); trade, ₹4,16,968 urban against ₹2,01,184 rural (2.1 times); services, ₹4,03,084 urban against ₹2,01,218 rural (2.0 times). The urban advantage is widest in manufacturing. Rural businesses usually have lower rent and wage costs, and less competition, so a rural or small-town business can still be very profitable; but if your plan depends on high-spending customers, the larger towns and cities of Jammu and Kashmir are where most of that spending is.

Registrations and state rules

Udyam registration is free and national, and is the gateway to MSME schemes, priority lending and protection against late payments. See our Udyam guide.

GST: Jammu and Kashmir uses the standard ₹40 lakh threshold for businesses supplying only goods, with ₹20 lakh for services or mixed supplies. See GST registration for small businesses.

Shops and establishments: Shops and establishments register under the Jammu and Kashmir Shops and Establishments Act, 1966, through the labour department. See shop and establishment registration and trade licences.

Trade licence: Municipal corporations in Srinagar and Jammu, and municipal committees and councils elsewhere, issue trade licences.

Professional tax: Check with the union territory’s tax department whether professional tax applies.

Land: since 2020, changes to land laws allow people from outside J&K to buy non-agricultural land, while agricultural land generally can only be transferred to agriculturists, with exceptions for permitted uses. Industrial land is available through the union territory’s industrial development agencies.

Food businesses need FSSAI registration or a licence, applied for nationally on FoSCoS, with the state food safety department handling inspections and state licences. See our FSSAI guide.

Employing people: the four labour codes in force since 21 November 2025 apply nationally, with Jammu and Kashmir’s own rules on details such as working hours, holidays and minimum wages. See employment contracts and HR basics.

Hiring in Jammu and Kashmir

ASUSE 2023-24 found that small businesses in Jammu and Kashmir paid hired workers, on average, the following each year, including employer contributions: manufacturing, ₹1,30,757 (close to the all-India average of ₹1,25,345); trade, ₹1,44,137 (about 16% above the all-India average of ₹1,24,250); services, ₹1,23,480 (close to the all-India average of ₹1,37,098). These averages help you budget, but you must pay at least the minimum wage Jammu and Kashmir has notified for each category of worker, which the state revises periodically, and follow PF and ESI rules once they apply. Advanton’s hiring cost calculator shows the full cost of a hire, and our guide to hiring your first employee explains PF, ESI and the labour codes.

Local tips

• Tourism is seasonal and sensitive to weather and other events; plan cash reserves.
• Winter is harsh in the Kashmir valley; plan heating, supplies and stock.
• Authenticity sells: certify Pashmina and saffron, and avoid fakes.
• Kashmiri, Dogri, Urdu and Hindi are used; local-language marketing helps.
• Pilgrim flows to Katra are steady year-round, with festival peaks.
• Check land rules before buying property.

Support for small businesses in Jammu and Kashmir

• New Central Sector Scheme (NCSS) for industrial development of J&K: incentives for new and expanding units, such as capital investment incentives and other support; check current terms and deadlines.
• J&K’s single-window system for approvals.
• District Industries Centres for registrations, PMEGP and union territory schemes.
• J&K Entrepreneurship Development Institute supports entrepreneurs with training and schemes.
• Handicrafts and handloom departments support artisans.

Late payments: Jammu and Kashmir has a Micro and Small Enterprises Facilitation Council, which hears cases filed by registered micro and small enterprises through the MSME Samadhaan portal. See getting paid on time.

Loans: national schemes such as Mudra, PMEGP and CGTMSE are available through banks across Jammu and Kashmir; see business loans and government schemes.

Spotlight: Pashmina, saffron and crafts

Jammu and Kashmir’s crafts and products are world-famous. Kashmir Pashmina, Kashmiri saffron and Kani shawls carry GI tags, and walnuts, apples, papier-mâché, carpets, wood carving and copperware support thousands of artisans and traders. Saffron from Pampore is prized worldwide.

For small businesses, the opportunities are in authentic sourcing, quality assurance, branding and reaching buyers in India and abroad, online and through exhibitions. Authenticity matters: Pashmina should be tested and labelled properly, and GI-tagged products should be sourced from authorised producers. Exports need an IEC and must meet importing countries’ rules.

The main cities

• Srinagar: tourism, handicrafts, houseboats, trade and services.
• Jammu: trade, services and the gateway for pilgrims.
• Katra: pilgrimage to Mata Vaishno Devi.
• Gulmarg and Pahalgam: tourism.
• Anantnag, Baramulla and Sopore: horticulture, apples and trade.

Opportunities in Jammu and Kashmir

• Crafts and textiles: selling handicrafts and handloom and exports.
• Saffron, dry fruits and horticulture: spices and selling online.
• Tourism: homestays and travel agencies.
• Pilgrimage services in Katra: florists and street food.
• Beekeeping: beekeeping and honey.

Common mistakes in Jammu and Kashmir

• Selling unverified Pashmina or saffron.
• Planning without cash reserves for seasonal or unexpected slowdowns.
• Buying land without checking the rules.
• Missing NCSS incentives for eligible units.

A checklist for starting in Jammu and Kashmir

1. Register on Udyam.
2. Register under the J&K Shops and Establishments Act.
3. Get your municipal trade licence.
4. Register for GST when required.
5. Get FSSAI registration for food businesses.
6. Check NCSS and other support with your DIC.
7. Arrange authentic sourcing for craft and food products.

Using Advanton’s free tools

Test your idea against ASUSE figures for Jammu and Kashmir with Advanton’s business idea reality check: choose your activity, select Jammu and Kashmir as your state, and compare your sales, costs and break-even with the state’s averages. Make GST-compliant invoices with the invoice generator, work out the real cost of hiring with the hiring cost calculator, and when you’re ready for customers, list your business free in the India Business Directory under Jammu and Kashmir.

Frequently asked questions

Can outsiders buy land in Jammu and Kashmir?
Since 2020, people from outside J&K can buy non-agricultural land, while agricultural land is largely restricted to agriculturists.

What is the New Central Sector Scheme?
A central scheme offering incentives for industrial development in J&K; check current terms.

Which J&K products have GI tags?
Kashmir Pashmina, Kashmiri saffron and Kani shawls, among others.

What GST threshold applies?
The standard ₹40 lakh for goods and ₹20 lakh for services.

Is Katra a good place for a pilgrim business?
Yes, with steady pilgrims to Mata Vaishno Devi year-round.

Do houseboats need registration?
Yes. Houseboats and other tourism businesses register with the tourism department.

Is Srinagar good for tourism businesses?
Yes, with houseboats, hotels, shikaras and crafts, though tourism can be sensitive to weather and events.

How do I test Pashmina authenticity?
Through accredited testing and certification, including GI labelling for Kashmir Pashmina.

Is saffron a good business?
Kashmiri saffron has a GI tag and premium demand; buy from authorised growers and test for purity.

Are there schemes for artisans?
Yes. Handicrafts and handloom departments offer training, tools and marketing support to registered artisans.

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Sources

1. MoSPI, Annual Survey of Unincorporated Sector Enterprises 2023-24, full report
2. Ministry of MSME, Udyam Registration portal
3. GST portal (Goods and Services Tax Network)
4. FSSAI, Food Safety Compliance System (FoSCoS)
5. Ministry of Labour and Employment
6. MSME Samadhaan (delayed payment portal)

Last reviewed November 7, 2026. Startup costs are estimates; check local prices, licensing and tax rules before you commit money.