Dubai-headquartered property developer Emaar has committed to a major project in India’s Jammu and Kashmir (J&K) region, which is being seen by the central government in Delhi as a major boost for its claims over the contested region.
On March 19, Emaar laid the first foundation stone of its $60m investment into a shopping and multi-purpose commercial tower in Srinagar, J&K’s capital city. Scheduled to be completed in 2026, the developers expect the project to create 13,500 jobs.
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PVR Group and Reliance Retail, India’s largest cinema chain and retailer, respectively, have already shown interest — along with other major brands, a source from Emaar confirms — with almost 50% of the mall space being leased out within the same day as its ground-breaking ceremony.
The commercial development follows significant efforts by local authorities to court investment from Gulf countries. In 2020, an official delegation visiting Expo Dubai signed several memoranda of understanding with Emirati firms.
Nikhil Nanda, managing director of Magna Buildtech, Emaar’s local development partner, tells fDi: “Considering the geopolitical situation of J&K, money coming from an Islamic Gulf nation allows India to show that there is growing global confidence in Jammu and Kashmir.
Money coming from an Islamic Gulf nation allows India to show that there is growing global confidence in Jammu and Kashmir
“Emaar is in J&K for a purely commercial venture that is profitable and for no other reason,” he adds.
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Inevitably, though, the project is politically charged.
Located at the northernmost tip of the Indian subcontinent, Kashmir is subject to one of the world’s most complex territorial disputes, whereby India, China and Pakistan all lay claim to parts of the region. Currently, India controls the central and southern portion of what was known as the princely state of Jammu and Kashmir during the British Raj; Pakistan controls the northwestern portion, while China controls the northeast. The India–Pakistan border, in particular, is heavily militarised, with frequent instances of armed conflict.
Under Article 370 of the Indian constitution, the J&K region — the only one in India with a Muslim-majority population — had been granted a special degree of autonomy since 1954. However, in 2019 the Hindu nationalist government of Narendra Modi ended the status quo, when it revoked half of Article 370. This had geopolitical repercussions, with Pakistan’s then prime minister Imran Khan urging other Muslim states to intervene.
Meanwhile, from an economic perspective, scrapping Article 370 gave the Indian government greater control to shape J&K’s investment policy on attracting FDI, including providing incentives such as tax breaks and infrastructure insurance. Rakesh Minhas, managing director at Jammu Kashmir State Industrial Development Corporation, says: “Following the change in constitution in 2019, Jammu and Kashmir developed a forward-looking investment policy, which is where Emaar’s investment came from.”
Although Indian authorities are touting the Srinigar development as the first foreign direct investment (FDI) project to be attracted by J&K, foreign investors have announced nine FDI projects in the region since 2013, according to greenfield investment monitor fDi Markets.
As always in J&K, India’s gain can be seen as Pakistan’s loss, and vice versa. The Emaar project is no exception.
“These investments seem like a way for India to strengthen control and gain land,” says Sardar Aftab Khan, CEO of the Kashmir Development Foundation, a non-profit organisation incorporated in Pakistan.
Niaz Shah, professor of law at the University of Hull, comments: “Pakistan would obviously resent such a move on the part of Emaar and might complain, overtly or covertly, against it to the UAE.”
Pakistan has not shown the same level of diplomatic engagement or financial support as its neighbours in order to attract FDI into Pakistan-controlled Kashmir (technically Azad Jammu and Kashmir). “There are no official invitations or investment packages announced by Pakistani authorities in Pakistan-administered Kashmir,” says Zaman Bajwa, head of Islamabad-based rights group Youth Forum Kashmir.
While Emaar is laying the ground for the Srinagar mall on the premise it will bear financial fruit, the Indian authorities are hoping the project can generate a much greater development — and political — dividends.