This report by Zachary Jones, Corey Singletary, Bartosz Szkatula and Farha Tahir (2010) deals with economic developement in the Jammu and Kashmir region as a way to reduce secessionism.
“Conflict and instability in Jammu and Kashmir have been a major hindrance to the state’s development and progress. Were the state to destabilize further, U.S. geopolitical interests would be significantly affected. The current lull in violence presents an opportunity to reduce secessionist sentiment and instability in the state. The core of the separatist argument lies in the underdevelopment of Jammu and Kashmir: socially, politically, institutionally, and economically. This report surveys the economic development potential of the most promising sectors for state development and analyzes the likelihood that their growth will reduce secessionism. We find that current Indian development programs for agriculture, tourism, and infrastructure in Jammu and Kashmir stand to increase absolute levels of development, increase economic decentralization, increase net capital inflows, and increase trade dependence with India. […] Increased trade dependency and continued net capital flows resulting from current development plans provide the greatest assurance of a reduction in secessionist sentiment. Effects of relative development are more difficult to predict, but we conclude that changes in this factor will likely reduce secessionism. While increased absolute development generally increases secessionism, we conclude that the likelihood that Jammu and Kashmir will achieve a level of development sufficiently high to contemplate self-sufficiency is extremely low. […] The United States can play a critical role in bringing meaningful development and reducing secessionist sentiment in Jammu and Kashmir. By lending its reputation, expertise, and financial resources to Indian development authorities, the United States can encourage effective planning and implementation of development programs targeted to reducing secessionist sentiment.”