SOPORE, India (Reuters) - It’s harvest time, but the market in the northern Kashmiri town of Sopore - usually packed with people, trucks and produce at this time of year - is empty, while in orchards across India’s Jammu and Kashmir state unpicked apples rot on the branch.

FILE PHOTO: Rotten apples are seen on a tree at an apple orchard, in Sopore, north Kashmir, September 13, 2019. REUTERS/Francis Mascarenhas

In one of the world’s largest apple growing regions, a weeks-old lockdown imposed after Prime Minister Narendra Modi dramatically abolished the state’s special constitutional status has cut transport links with buyers in India and abroad, fruit growers and traders say, plunging the industry into turmoil.

Modi sold the move as a way to spur growth by integrating the state with the rest of India. But, for now, the unrest that has come in the wake of his government’s action has upended the economy, further fuelling resentment in the Muslim-majority territory where an armed revolt against India rule has ebbed and flowed over 30 years.

At dawn late last week the market in Sopore, a town known locally as “Little London” for its lush orchards, big houses and relative affluence, was deserted, its gates locked.

“Everyone is scared,” a lone trader, rushing to an adjoining mosque for morning prayers, told Reuters. “No one will come.”

Apples are the lifeblood of Kashmir’s economy, involving 3.5 million people, around half the population of the state.

In a surprise move on Aug. 5, just as the harvest season as getting under way, the government abrogated provisions in India’s constitution that gave the Jammu and Kashmir partial autonomy and stipulated only residents could buy property or hold government jobs. Strict movement restrictions were imposed simultaneously, and mobile, telephone, and internet connections snapped.

The government said the immediate priority was to prevent an eruption of violence in Kashmir, where more than 40,000 people have been killed since 1989, and that curbs are slowly being eased, including the opening up of landline phones.

Further out, the government has promised rapid economic development and plans an investor summit later this year to attract some of India’s top companies to the region, create jobs and lure young people away from militancy.

In the short-term, however, farmers and fruit traders say the clampdown is stopping them from either getting their produce to market or shipping it out to the rest of India. Some say they have also been threatened into stopping work by militant groups.

In orchard after orchard surrounding Sopore, apples hung rotting on trees. “We are stuck from both sides,” said Haji, a trader, sitting inside a sprawling two-story house in Sopore. “We can neither go here, nor there.”

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BUSINESSES REELING

Business people who spoke to Reuters say it is not just the fruit industry that is reeling - two other key sectors of Kashmir’s economy, tourism and handicrafts, have also been hit hard.

Shameem Ahmed, a travel agent who owns a houseboat in the summer capital Srinagar, said this year’s tourist season was completely wiped out.

“August was peak season, and we had bookings up to October,” he said. “It will take a long time to revive, and we don’t know what will happen next.”

The near complete lack of tourists has also hit carpet traders such as Shoukat Ahmed.

“When there are no tourists, there are no sales,” he said. “We are also unable to sell across India because communication is down.”

At a major chamber of commerce in Srinagar, some members said the continuing lack of internet and mobile connections had paralyzed their work, including the ability to file taxes and make bank transactions.

Some businessmen have also been among the hundreds of politicians and civil society leaders detained by the authorities since early August to dampen any backlash.

While many of those arrested across the region have since been released, Haseeb Drabu, a former state finance minister from a local party once allied with Modi’s ruling BJP, said outsiders were now balking at doing business with Kashmiris.

“With a few businessmen raided and more under detention, why would anyone from the rest of the country engage with them and subject himself to a possible enquiry of his transaction and opening of his books?” Drabu said.

“IT’S HOPELESS”

India and Pakistan have twice gone to war over Kashmir, which is divided between them but both claim in full, and it remains at the heart of decades of hostility.

In February, the nuclear-armed neighbors engaged in an aerial duel after a deadly militant attack on an Indian paramilitary convoy in Kashmir, raising the fear of a broader conflict.

The latest bout of instability has been devastating to the likes of Manzoor Kolu, who runs a five-roomed houseboat on Srinagar’s mirror-calm Dal lake, framed by snow-clad mountains.

Days before Aug. 5, Kolu said police had come asking him to move tourists out of the property, fearing unrest.

“They told me that if anything happens, I would be responsible,” he said. His four guests, all Indian tourists, left shortly after. No guest has come since.

“Now we have to wait until next April. It’s hopeless,” he said, sitting inside the living room of the 35-year-old boat, packed with intricately carved wooden furniture and traditional Kashmiri carpets. “So many times, I’ve thought of selling, but this is my father’s whole life’s achievement.”

Kashmir’s tourism industry has lost momentum in recent years, starting with devastating floods in 2014 and followed by a sustained period of unrest in 2016.

Tourist numbers had begun improving between April and July this year, government data showed, only to drop off a cliff in August. Only 10,130 tourists came last month, compared with nearly 150,000 in July and more than 160,000 in June this year.

In a one-story house in Srinagar’s working-class Zoonimar neighborhood, Abdul Hamid Shah sits beneath a window quietly embroidering a Kashmiri shawl. Each shawl is at least three months’ work, and some take a whole year to complete.

Shah is typically paid 35,000 Indian rupees ($490) per shawl, which he often gets in monthly instalments of around 10,000 rupees. Since August, his payments from a shawl trader he has worked with for a decade have shrunk.

“He’s telling me he doesn’t have money because there is no business,” Shah said.