Srinagar

Kashmir's capital sits on Dal Lake like a jewel on a wound. Srinagar is one of the most beautiful and most contested cities on Earth—a place where Mughal gardens, walnut-wood houseboats, and saffron fields coexist with military checkpoints, barbed wire, and one of the highest soldier-to-civilian ratios of any city outside an active war zone. The city's economy is hostage to its politics in a way that no business textbook can adequately explain.

Srinagar's traditional economy runs on three products that command global premiums: Kashmiri saffron (the most expensive spice on Earth at $500-$5,000 per kilogram), pashmina wool (from Changthangi goats grazing at 4,500 meters), and hand-knotted Kashmiri carpets that take years to produce. Each of these industries depends on geography and craftsmanship that cannot be replicated elsewhere—a form of natural monopoly created by altitude, climate, and generational skill transfer.

Tourism once contributed significantly to the city's economy. Dal Lake's houseboats, the Mughal gardens of Shalimar and Nishat, and skiing at Gulmarg drew visitors from across India and abroad. But cycles of militancy and military crackdown have repeatedly collapsed the tourist economy—the industry essentially vanished during the 1990s insurgency, partially recovered in the 2000s, then suffered again after the 2019 abrogation of Article 370 and COVID lockdowns. Each cycle destroys businesses that took years to build.

Srinagar demonstrates what happens when a city's primary resources—beauty, craftsmanship, strategic location—are simultaneously its greatest assets and its greatest liabilities. The same mountain geography that produces saffron and pashmina also produces the territorial dispute that prevents stable economic development. Until the political question resolves, Srinagar's economy will continue oscillating between potential and paralysis.