Kashmiri businesses teetering on bankruptcy, as year-long Internet shutdown chokes e-commerce

This is the second in a series of three articles chronicling the impact of the nearly year-long disruption in internet services in the Kashmir region, one of the longest in the world. Part Two looks at how the local economy has been affected.

Musiab Nisar always aspired to be a successful entrepreneur. Despite holding a Master’s degree in Environmental Science, Nisar’s was always keen on creating an independent business.

Barely months after his graduation in October 2018, Nisar started a home-furnishing unit which specialised in manufacturing and supplying modular kitchen sets. To make his offering stand out, Nisar decided to look beyond conventional business models and planned to leverage the internet for sales. He did so by reaching out to his customer base through social media platforms like Facebook and Instagram.

With his personal savings of few lakh rupees and some additional help from his parents, Nisar set his factory unit in Lassipora industrial area, 40-kilometers south of Srinagar, and employed 10 people, most of them of his age group.

“We got an overwhelming response from people. Our sales were going beyond my expectations,” said Nisar, who soon started to expand his operations outside the Kashmir valley. Nisar spent hours attempting to expand his reach online and it paid off. “Internet broke market barriers for me. People from remote places, from different cities and regions, started contacting me,” said Nisar.

In six months, Nisar had to double his workforce to meet surging demand and he then made the decision to further expand his manufacturing unit. “I was earning good profits. I was working more on my market space on the internet and my business was expanding day by day,” he added.

Lockdown begins

However, when the union government-imposed a sudden lockdown in Kashmir and blocked internet, cellular and landline connectivity on August 5 — the day region was stripped of its semi-autonomous status — Nisar couldn’t fathom how his business is going to be impacted.

“I thought communication blackout will remain for some days or maybe a few weeks,” said Nisar adding it initially appeared involuntary break for him and his staff. “I didn’t lose my hope. I was ready to keep paying my staff.”

In Kashmir, people had not imagined that they will be passing through one of the world’s harshest communications blackouts. The internet continued to remain shut completely for six months and was restored in a highly restricted manner on January 25. Connectivity was limited to 2G speeds and only 301 government-approved websites could be accessed.

A year down the line, Nisar’s business is no more a success story but on the verge of closure. “For six months I couldn’t sell even a single unit,” said Nisar, who has cut his staff by half but doesn’t know how long he will be able to keep them as well. He is relying on his parents to pay the salaries to the staff. “I don’t know how long they will be able to support me,” he said.

After the 2G internet was resumed in Kashmir, Nisar was hopeful that his business will again take-off. But that has not been the case. “The sales are not even 25 percent of what they used to be earlier. 2G internet is not working for me,” he said.

Nisar used to manufacture the products and then post their video on social media pages. But with the slow speed internet, the reach of his videos has decreased considerably. The videos which were once watched by 25,000 people are barely registering a dozen views now. The loss in business and no sight of relief has taken a mental toll on Nisar’s health. “I am depressed. I had to consult a doctor and now I am on medication,” he said.

Crippling impact of Internet shutdowns on Kashmiri businesses

Businesses in Kashmir have been crippled due to the lockdown and the communication blackouts.

In a report released on July 22, Forum for Human Rights in Jammu and Kashmir stated that economic losses to the tune of a staggering Rs 40,000 crore (USD 5.3 billion) since August 2019, were registered in the region.

The data is based on the estimates by the Kashmir Chamber of Commerce and Industries (KCCI).

The report states that in the first four months of lockdown Kashmir businesses “suffered a loss of Rs.17,878.18 crores ($ 2.4 billion),” and from January to July 2020 “amount to another Rs.22,000 crores ($2.9 billion),  were suffered.

The industries in the region, the report states, from August 2019 to June 2020 suffered an estimated loss of almost Rs. 40,000 crores ($5.3 billion. The job losses, as per the report, have been half a million.

Nisar who would once give business ideas to his friends is suggesting against it now. “I tell my friends to look for a good job. I don’t think anyone can run a successful business here,” said Nisar.

Internet bans are not new to Kashmir. The economy in the region recorded a loss of nearly Rs 4000 crore between 2012 and 1017 due to 34 instances of internet shutdowns as per a report by the New Delhi-based think tank International Council for Research on International Economic Relations (ICRIER).

But the August communication gag was much harsher and termed as the longest ban in any democracy in the world.

Choking e-commerce

“Internet is oxygen to the e-commerce,” said Samiulla, 28-year-old who co-founded a logistics company in January 2019 in Kashmir. “When government shuts the internet it chokes our business.”

Many of Samiullah’s friends were selling Crochet art, Pakistani dresses and other products online. But they would face problems in delivering the products to the customers. To resolve this, Samiullah and his friend Abid Rashid, decided to set up a logistics company. Their goal was to help local online sellers deliver their products to the customers. Starting with a single employee, the company grew steadily and soon established in the small market of Kashmir as a reputed name. Within few months, the duo had around 500 merchants working with them.

The internet shutdown in August last year, however, left the company in a hole. “We were paralyzed. We couldn’t do anything,” said Samiullah. The situation is taking the young people away from the business sector. “No one is going to invest here. There is no security,” said Samiullah, who had boot tabbed for setting up his company.

The situation is leading people like Samiullah to look for alternate markets. “We are starting operations in Delhi,” he said adding that Kashmir is not a reliable market. “We still have slow-speed internet here. It is affecting our work.” But there is always looming unpredictability in Kashmir, and Samiullah says, he wants to have an alternative if there is again August 5 situation.

Aakash Hassan is an independent journalist based in Srinagar.


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