By Home Academy

Jammu & Kashmir Economy 2025–26: Contribution to India’s GDP, Growth Trends and Key Drivers

Jammu & Kashmir’s Share in India’s National Economy

According to the Economic Survey Report 2025–26, the Union Territory of Jammu and Kashmir contributes nearly 0.8 per cent to India’s national GDP. This share closely matches the region’s proportion in the national population, reflecting a balanced economic representation within the Indian federal structure. Despite geographical challenges and a long phase of transition, J&K has gradually strengthened its economic base and demonstrated resilience in growth indicators.

Economic Growth Outlook for 2025–26

As of February 2026, the Real Gross State Domestic Product (GSDP) of Jammu and Kashmir is estimated to grow at 5.82 per cent in 2025–26. This growth rate signals a steady recovery and expansion trajectory, driven by improved governance, infrastructure development, and revival of key sectors such as tourism and services. The growth performance places J&K among the better-performing regions in North India during the post-pandemic period.

Size of the J&K Economy

The overall size of the Jammu and Kashmir economy for 2025–26 is estimated at around ₹2.86 lakh crore in nominal terms, while the real GSDP stands at approximately ₹1.50 lakh crore. These figures underline the expanding economic capacity of the Union Territory and its increasing integration with the national economy. The steady rise in GSDP also reflects enhanced investment activity and sectoral diversification.

Sectoral Composition of Jammu & Kashmir Economy

The economic structure of Jammu and Kashmir is predominantly service-oriented. The tertiary sector contributes about 61.02 per cent to the GSDP, making it the backbone of the UT’s economy. This sector includes tourism, trade, transport, public administration, education, and healthcare.

The primary sector accounts for nearly 20.45 per cent, highlighting the continued importance of agriculture, horticulture, livestock, and allied activities. The secondary sector contributes around 18.52 per cent, covering manufacturing, construction, and power generation. While comparatively smaller, the secondary sector has significant potential for future expansion.

Per Capita Income Status

The per capita income of Jammu and Kashmir is estimated at ₹1,68,243 for 2025–26. This improvement in per capita income indicates rising economic productivity and better income generation opportunities. Although there remains scope to bridge the gap with more industrialized states, the upward trend reflects positive structural changes in the UT’s economy.

Comparative Performance with Other States

Between 2019–20 and 2024–25, Jammu and Kashmir’s economic growth rate has remained higher than that of Delhi, Himachal Pradesh, and Punjab. This comparative advantage is notable, especially given J&K’s unique geographical and socio-political context. The data underscores the effectiveness of recent economic reforms and focused sectoral interventions.

Key Growth Drivers of Jammu & Kashmir

One of the strongest drivers of economic growth in Jammu and Kashmir is tourism. In 2025, around 1.78 crore tourists visited the UT, generating large-scale employment and boosting allied sectors such as transport, hospitality, handicrafts, and local trade. Tourism has emerged as a powerful catalyst for inclusive growth and regional development.

The agriculture sector is also undergoing a significant transformation. There is a visible shift towards high-value crops, horticulture, and cash crops, which has improved farmers’ income and enhanced export potential. Apples, saffron, walnuts, and other horticultural products continue to play a crucial role in rural economic stability.

MCQ questions 

1. According to the Economic Survey Report 2025–26, the contribution of Jammu and Kashmir to India’s national GDP is approximately
   A. 0.5 per cent
   B. 0.8 per cent
   C. 1.2 per cent
   D. 2.0 per cent
   Correct Answer: B

2. The estimated growth rate of Jammu and Kashmir’s Real GSDP for the year 2025–26 is
   A. 4.25 per cent
   B. 5.10 per cent
   C. 5.82 per cent
   D. 6.50 per cent
   Correct Answer: C

3. The nominal Gross State Domestic Product (GSDP) of Jammu and Kashmir for 2025–26 is estimated at around
   A. ₹1.50 lakh crore
   B. ₹2.10 lakh crore
   C. ₹2.86 lakh crore
   D. ₹3.50 lakh crore
   Correct Answer: C

4. The real GSDP of Jammu and Kashmir for the year 2025–26 is approximately
   A. ₹1.10 lakh crore
   B. ₹1.30 lakh crore
   C. ₹1.50 lakh crore
   D. ₹1.75 lakh crore
   Correct Answer: C

5. Which sector contributes the highest share to Jammu and Kashmir’s economy as per the Economic Survey 2025–26
   A. Primary sector
   B. Secondary sector
   C. Tertiary sector
   D. Mining sector
   Correct Answer: C

6. The contribution of the tertiary sector to Jammu and Kashmir’s GSDP is nearly
   A. 45 per cent
   B. 52 per cent
   C. 61 per cent
   D. 70 per cent
   Correct Answer: C

7. The share of the primary sector in Jammu and Kashmir’s economy is approximately
   A. 15.20 per cent
   B. 18.75 per cent
   C. 20.45 per cent
   D. 25.10 per cent
   Correct Answer: C

8. The secondary sector contributes about what percentage to Jammu and Kashmir’s economy
   A. 12.40 per cent
   B. 16.85 per cent
   C. 18.52 per cent
   D. 22.60 per cent
   Correct Answer: C

9. The estimated per capita income of Jammu and Kashmir for the year 2025–26 is
   A. ₹1,25,000
   B. ₹1,45,600
   C. ₹1,68,243
   D. ₹1,92,500
   Correct Answer: C

10. During the period 2019–20 to 2024–25, Jammu and Kashmir’s economic growth rate was higher than that of
    A. Maharashtra and Gujarat
    B. Tamil Nadu and Karnataka
    C. Delhi, Himachal Pradesh, and Punjab
    D. Rajasthan and Uttar Pradesh
    Correct Answer: C

11. Tourism emerged as a major growth driver in Jammu and Kashmir with approximately how many tourist visits recorded in 2025
    A. 95 lakh
    B. 1.25 crore
    C. 1.50 crore
    D. 1.78 crore
    Correct Answer: D

12. The recent transformation in Jammu and Kashmir’s agriculture sector is mainly characterized by
    A. Expansion of food grain production
    B. Shift towards high-value crops and horticulture
    C. Complete mechanization of farming
    D. Decline in traditional crops
    Correct Answer: B

13. The economic contribution of Jammu and Kashmir to India’s GDP is proportional mainly to its share in
    A. Industrial output
    B. Land area
    C. Population
    D. Natural resources
    Correct Answer: C

14. Which of the following sectors benefits the most indirectly from tourism growth in Jammu and Kashmir
    A. Mining and quarrying
    B. Heavy engineering
    C. Transport, hospitality, and handicrafts
    D. Chemical manufacturing
    Correct Answer: C

15. The backbone of Jammu and Kashmir’s economy, as per recent estimates, is
    A. Agriculture
    B. Manufacturing
    C. Services
    D. Mining
    Correct Answer: C

Conclusion

The Economic Survey 2025–26 clearly highlights Jammu and Kashmir’s growing economic significance, with a 0.8 per cent contribution to India’s GDP, robust GSDP growth, and strong performance in services and tourism. With sustained policy support, infrastructure investment, and sectoral diversification, Jammu and Kashmir is well-positioned to accelerate its economic growth and further strengthen its role in India’s overall development story.