Contrasting political economies across the line of control: PoJK and Indian J&K in perspective

Political life in Pakistan-occupied Jammu & Kashmir encompassing both Pakistan-administered Jammu & Kashmir and Gilgit-Baltistan, has been marked by persistent instability. Leadership changes, shifting alliances, and legislative defections have created a volatile governing environment that undermines institutional continuity.  For the past few years, Pakistan-occupied Kashmir has been engulfed in unrest, driven by a powerful grassroots movement challenging both economic hardship and entrenched political structures. The Jammu Kashmir Joint Awami Action Committee (JAAC), a coalition of traders, activists, and civil society groups, spearheaded the protests since 2023, which have seen these economic grievances evolve into a broader political struggle. 

The unrest also exposed deeper structural grievances. Many local groups argue that Islamabad’s tight administrative control leaves little room for genuine self-governance, fueling a sense of political marginalisation. Their demands for meaningful reforms ranging from fiscal autonomy to constitutional clarity reflect a longstanding perception that the region’s political institutions function more as extensions of federal authority than as representatives of local aspirations. Despite the autonomy granted on paper, Pakistan-administered Kashmir has been arbitrarily ruled by Pakistan since Partition. The Karachi Agreement in 1949, followed by the 1974 constitution and the Northern Areas Council Legal Framework Order, means that Islamabad practically dictates all matters in its controlled section of the disputed region, which also includes Gilgit-Baltistan. The central government is effectively suppressing the rights of the locals, including any decision-making over their resources.

These tensions came to a head in 2025, when widespread public frustration over governance failures, soaring utility costs, and the region’s limited autonomy triggered some of the largest protests seen in years. Demonstrations quickly escalated into violent confrontations, resulting in shutdowns, injuries, and several fatalities.

Jammu & Kashmir, meanwhile, has undergone a gradual but notable shift following the 2019 administrative reorganization, toward more structured and participatory governance. Although the transition initially produced a period of political uncertainty, the eventual conduct of competitive legislative elections marked an important institutional milestone. These elections reintroduced representative politics to the region and signalled a move toward restoring local decision-making processes. International assessments reflected this shift: Freedom House revised the region’s political status from “Not Free” to “Partly Free,” citing the resumption of electoral activity and the re-establishment of avenues for political contestation. According to the Freedom House report “Legislative Assembly elections, held for the first time since 2014, saw a turnout of 64 percent, reflecting a significant level of public engagement despite the challenging political environment.”

While challenges remain, the reactivation of electoral institutions and the return of an elected assembly have contributed to a more stable governance environment than in the immediate aftermath of the reorganization. The region’s administrative machinery has also expanded its focus on development planning, infrastructure investment, and service delivery, reinforcing a sense of political normalization. Together, these developments suggest a slow but discernible consolidation of governance structures and a more predictable political landscape than in previous years.

The security landscape across the two parts of Jammu & Kashmir remains deeply shaped by their geopolitical context. Still, the nature of insecurity differs markedly on each side of the Line of Control. In Pakistan-occupied Jammu & Kashmir, persistent reports describe the region as a base of activity for various militant groups, a characterization that has drawn sustained international attention. This environment has contributed to periodic unrest within the territory itself. 

Across the Line of Control, Indian Jammu & Kashmir faces a different but related set of security pressures. The region continues to be targeted by Pakistan-based militant networks, with infiltration attempts, arms smuggling, and narcotics trafficking forming part of a broader strategy to destabilize the area. These cross-border activities keep the region on a constant state of alert and contribute to recurring cycles of violence. As a result, the territory remains a focal point in India-Pakistan tensions, with incidents of cross-border firing and retaliatory military actions periodically disrupting civilian life and regional calm.

Economic trajectories on the two sides of Jammu & Kashmir have diverged in recent years, shaped by contrasting governance structures and levels of institutional capacity. In Pakistan-occupied Jammu & Kashmir, persistent economic stagnation and rising living costs have placed a significant strain on households. Despite its strategic importance, the region has not benefited from sustained investment in infrastructure or long-term economic planning. Roads, power networks, and public services remain limited, and many areas continue to rely on outdated or temporary facilities. This stagnation is closely tied to the territory’s ambiguous constitutional status, which restricts local decision making and leaves major development priorities dependent on Islamabad’s political calculations rather than regional needs.

PoJK suffers from a narrow and fragile base. Industrial activity is minimal, employment opportunities are scarce, and the region remains heavily dependent on federal subsidies. Rising living costs, particularly for electricity and essential goods, have further strained households. 

Resource extraction has added another layer of frustration. Local communities frequently accuse Islamabad and external actors of exploiting the region’s hydropower potential, forests, and minerals without reinvesting the proceeds into local development. Large hydropower projects, for example, supply electricity to Pakistan’s national grid while residents face high tariffs and unreliable service. This dynamic has fuelled a sense that the region’s natural wealth benefits outsiders far more than the people who live there.

These pressures culminated in the earlier-mentioned large-scale protests in October 2025, when soaring electricity tariffs and food prices triggered widespread demonstrations. The state’s response, marked by the use of tear gas, live fire, and forceful dispersal, resulted in multiple deaths and reinforced perceptions that economic grievances are inseparable from political marginalisation. Local activists argue that without meaningful autonomy and structural reforms, the region’s economic distress will continue to fuel public anger and demands for accountability.

Across the Line of Control, Indian Jammu & Kashmir presents a more complex but generally more positive economic picture. While the region still grapples with security-related constraints, several indicators point to sustained economic activity and infrastructure expansion. 

Since the 2019 reorganization, Jammu & Kashmir has seen a marked increase in economic activity, driven by both public and private investment: streamlined regulations, new land use policies, and targeted incentives for industry. The region has attracted commitments worth thousands of crores across sectors such as manufacturing, renewable energy, tourism, pharmaceuticals, and information technology. Industrial estates in Jammu, Kathua, and Pulwama have expanded, while new industrial parks and logistics hubs are being developed to integrate the region more closely with national supply chains. Tourism, long a pillar of the local economy, has also benefited from improved infrastructure and marketing, with record visitor numbers in recent years. These developments have collectively contributed to a more diversified economic base and a more predictable investment climate.

Agriculture, which supports a large share of the population, has undergone significant modernization efforts. Programs promoting high density apple orchards, improved cold storage facilities, and scientific horticulture have increased productivity and reduced post harvest losses. The introduction of new crop varieties, expansion of saffron-related initiatives, and support for floriculture and sericulture have broadened income opportunities for rural households.

Investments in roads, power projects, tourism facilities, and industrial estates have contributed to a gradual shift toward greater self-sufficiency. Initiatives in sports, education, entrepreneurship, and public services have broadened opportunities for segments of the population, generating a sense of forward momentum. Major road projects, tunnel construction, and power sector upgrades have improved connectivity within the region and with the rest of India. These improvements have reduced travel times, facilitated trade, and enhanced access to markets and services.

These differing economic environments shape public sentiment in distinct ways. In Pakistan-occupied areas, frustration with Islamabad has intensified, with economic hardship acting as a catalyst for broader political demands. In Indian Jammu & Kashmir, public attitudes remain varied, but the visible expansion of development programs and investment has created a more optimistic outlook among many residents. Although concerns about security continue, the overall climate reflects a more stable and forward-looking trajectory compared to the entrenched economic and political discontent in Pakistan-occupied Jammu & Kashmir.