Free Markets will solve India’s Kashmir Problem

As I write this, 16 people have been killed in Kashmir as a result of violent street protests triggered by the death of a militant at the hands of security forces. And there is nothing new or unusual about this. Almost every other day there are reports of Kashmiri civilians pelting stones and getting into clashes with security forces.

Why is there so much tension in Kashmir? There are some common conclusions I have seen people jumping to. Some say it is because Pakistani militants create trouble in the region. But that is contradicted by a recent report in the Indian Express saying that most militants are Kashmiri locals and not from Pakistan.

And why does the civilian population support these militants? One most commonly floated conspiracy theory is that the Pakistani government is funding dissent by using fake currency. That’s nonsense.

The root cause of tension is the economic isolation of Kashmir from the rest of India. People from the rest of India cannot buy land, set up a business or think of settling permanently in Kashmir. The government does not let them. It is this curtailment of economic freedom which causes tension.

A comparison will help to better illustrate this point. If you ask yourself where, in India, you would find the greatest harmony and peace among people, probably cities like Mumbai, Delhi and Bangalore would come to mind.

In Mumbai, where I live, we have politicians who say that north Indians are a menace and should be expelled from Maharashtra, and have repeatedly tried to incite violence against north Indians. People just ignore them, and they are soundly defeated in every election. Why do divisive politicians have no influence in Mumbai?

Because in Mumbai, we have great economic freedom. North Indians (and people in general) are free to live and work here. They are our customers and business partners. They are our neighbours and co-workers. They are also the maids who clean our homes. They are the drivers and security guards. If they go away everything would become more expensive for us.

In Mumbai, people don’t care whether you are a man or a woman. They don’t care what language you speak, what your caste is or what religion you practice. They only care about what you are selling and at what price. These impersonal forces of the free market ensure that a Mumbaikar, who might not like north Indians, still does business with them and co-exists peacefully.

That is why economic freedom is so essential, not only for efficient wealth creation, but also to promote peace and harmony among diverse people.

Now ask yourself, why do divisive politicians and separatist groups have so much influence in Kashmir? Because Kashmiri people have seen Indians in mainly two ways. As aggressive military personnel who oppress them, or as oblivious over privileged tourists who stay in Srinagar for a few days, do some shopping and go back.

If people are allowed to do business in Kashmir, to work and even permanently settle there, they will become as much a part of life in Kashmir as north Indians are in Mumbai. Only when Kashmiri people do more business with the rest of the Indian people will there be a lasting peace.

What governments have been doing, since time immemorial, by curtailing economic freedom is that they have been tearing apart the fabric of our society.



  1. Shreyas Bharadwaj (@shreyasbdwaj) · November 16, 2016

    What you suggest would also solve the demographic problem in Kashmir. Terrorism wouldnt have much popular support if it wasnt a muslim majority. Btw Kashmiri per capita incomes are quite high when compared to Jammu or other states across Indi. Poverty is low. The problem is demographic and not economic


    • Jairaj · November 19, 2016

      It would be erroneous to equate Muslims with terrorists. Muslims are everywhere, and just being Muslim does not really explain why they would support terrorists. Therefore I do not think that it is a demographic problem.

      The problem is economic in the sense that the market is not free. Economy is not only about GDP and per capita incomes, but is a very broad thing with countless dimensions, and we have to consider all of them.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s