by Sri Varshith Kumar Reddy E
On the Orange Economy, India’s creative capital, and why Jammu & Kashmir may hold more on its balance sheets than it knows
There is an old economic habit of mind that measures the wealth of nations by what they dig, smelt, stitch, or assemble, that is, by the tonnage of things produced over the quality of ideas expressed. For most of modernity, this was a defensible simplification. Land, labour, and capital were the holy trinity of growth theory, and the factory, above the atelier, was the cathedral of development. Something quietly irreversible has happened since.
The most valuable company in the world holds no mines. The most-watched film of the decade cost less to make than a mid-sized expressway in Uttar Pradesh. A carpet woven in a Srinagar workshop, if branded and narrated with care, can command prices in a Copenhagen design store that would make a steel manufacturer weep with envy. What we are witnessing, slowly and distinctly, is the ascent of creativity as capital, in the most rigorously economic sense of the term.
This is the provocation at the heart of what economists and policymakers now call the Orange Economy: the productive system built on imagination, cultural heritage, and intellectual property. The term, popularised in a 2013 Inter-American Development Bank study, was chosen deliberately, orange being the colour associated with creativity, and the phenomenon it names is older and more consequential than any branding exercise.
UNCTAD’s Creative Economy Outlook 2024 puts the sector’s contribution between 0.5 per cent and 7.3 per cent of GDP across the 36 economies surveyed, with employment ranging from 0.5 per cent to 12.5 per cent of national workforces. Creative services exports reached $1.4 trillion in 2022, a 29 per cent increase since 2017, and their share of total global services exports rose from 12 per cent to 19 per cent over the preceding decade. Developing countries have more than doubled their share of global creative goods exports, from 10 per cent in 2010 to 20 per cent in 2022, a meaningful progress that nonetheless stops well short of the services frontier, where developed economies continue to dominate and where the margins, multipliers, and IP rents are concentrated. These are structural signals.
The End of the Factor-Based Fantasy
To understand why this matters, one must trace the arc of economic transformation across the century. The transition from agrarian to industrial economies involved substituting human muscle with machine capital, a relatively legible story of factor accumulation. The transition to knowledge economies was subtler than it suggested that education, innovation, and human capital could generate returns exceeding those from physical investment. The Orange Economy pushes this logic to its radical conclusion. It insists that the primary unit of value creation is a configuration of imagination that can be a story told, a design executed, a song recorded, or a tradition codified into exportable experience.
This disrupts the Solovian growth model in ways that standard macroeconomics has not fully reckoned with. When Paul Romer formalised the idea that ideas are non-rival and partially non-excludable, he cracked open a door. The Orange Economy walks through it and declines to look back. Unlike a machine that depreciates and a labourer who tires, a piece of intellectual property can be reproduced at near-zero marginal cost and sold simultaneously in a hundred markets. A country that successfully monetises its creative output shifts from selling commodities, whose prices it cannot control, to selling experiences and IP, whose value it helps determine. South Korea’s creative economy, spanning K-pop, K-drama, and the sprawling spillovers of K-beauty, generates billions in indirect export revenue through tourism multipliers and consumer goods brand premiums. This is hard revenue with measurable income elasticity, which differs sharply from the “soft power vanity” label that sceptics reflexively attach to cultural industries.
Here lies the first asymmetry. The Orange Economy carries no guarantee of equitable distribution, and risks replicating older hierarchies in newer forms. UNCTAD data shows that developed countries continue to dominate creative services exports, while developing countries remain concentrated in creative goods, primarily the lower-value end of the chain. Developing countries have expanded their share of global creative goods exports from 10 per cent in 2010 to 20 per cent in 2022, which represents genuine progress, but on the services side, where margins and multipliers are highest, developed economies retain a commanding 80 per cent share, a dominance that has proved stubbornly resistant to redistribution.
The weaver in Varanasi whose motifs appear on a Paris couture runway rarely sees Paris prices. Cultural capital without institutional scaffolding is a vulnerability as much as an asset, and the distance between those two conditions is almost entirely a function of policy.
There is also a measurement problem that borders on a scandal. GDP, as conventionally computed, systematically undercounts creative output. Much of the Orange Economy is informal, transactional, unrecorded, and deeply resistant to national accounts methodology. The economic value of a traditional Pashmina design that has circulated for four centuries, the storytelling tradition of a Ladakhi griot, and the architectural grammar of a Mughal-era urban fabric, none of these appear in any input-output table. The invisibility of cultural capital in national accounting is a political economy choice, one that shapes which sectors receive public investment, which workers receive social protection, and which forms of labour are considered dignified.
The macroeconomic question that cannot be avoided is whether the Orange Economy complements or substitutes for manufacturing-led development, the Lewisian pathway that transformed East Asia. For a country at India’s stage, the answer resists simple framing. Manufacturing still matters for structural transformation, for absorbing low-skill labour, and for building technological capability. The error would be to imagine that India must exhaust one trajectory before embarking on another. The two can coexist, serve different geographies and demographics, and reinforce each other through design intensity, a reality that Germany’s Mittelstand and Italy’s industrial districts have long demonstrated.
India’s Creative Contradiction
India is, simultaneously, one of the most creatively endowed nations on earth and one of the most institutionally unprepared to capitalise on that endowment. The demographic dividend, with a median age of 28 and a digitally native population unprecedented in scale, is the obvious starting point. India’s media and entertainment sector reached Rs 2.5 trillion in 2024, with the AVGC industry alone projected to require two million professionals by 2030. The Union Budget 2026-27 acknowledges this trajectory, committing to an Indian Institute of Creative Technologies and content creator labs across 15,000 secondary schools. India also holds 318 GI-tagged handicraft products across 455 formally classified craft categories, an inventory of codified creative capital that few countries can rival.
Enthusiasm, however, must be distinguished from strategy. India’s IP enforcement remains sluggish; the gap between GI registration and GI litigation is wide enough to drive a container ship through. Cultural institutions are managed, more often than one would prefer, as departments of nostalgia, seldom as engines of innovation. Educational curricula treat creativity as ornamental. The linguistic diversity that ought to be a competitive advantage with twenty-two scheduled languages, hundreds of dialects, each carrying its own aesthetic universe, gets treated as a problem of translation over a catalogue of export-ready content. The informality of most creative livelihoods compounds everything, including artisans, musicians, and craftspeople, who remain invisible to the financial system, unable to access credit, insurance, or the institutional support that comparable workers receive in comparable economies.
Jammu & Kashmir: A Repository in Search of a Strategy
Jammu and Kashmir enters this argument as more than a case study. It enters as perhaps the most instructive test of everything the Orange Economy promises and threatens. A civilisational archive of extraordinary depth, the region sustains 179 craft clusters, employing approximately 3.5 lakh persons directly and indirectly across Pashmina weaving, carpet knotting, papier-mâché work, crewel embroidery, walnut wood carving, and khatamband ceiling artistry, each representing centuries of accumulated aesthetic intelligence.
In the Kanihama cluster alone, nearly 5,000 weavers produce GI-tagged Pashmina shawls whose provenance is now legally protected from machine-made imitation. Handicraft and handloom exports from the Union Territory reached Rs 2,567 crore in FY 2024-25, more than doubling in three years. The first quarter of FY 2025-26 alone recorded Rs 309.62 crore in outward shipments, a 243 per cent surge over the corresponding quarter of the previous year and the strongest first-quarter performance in four years. The Handicrafts and Handloom Department has set an export target of Rs 1,500 crore for the full financial year, a figure, if realised, that would mark a structural inflexion rather than a cyclical uptick.
The Orange Economy offers J&K a growth pathway that conventional development models have failed to furnish, one that is non-extractive, employment-intensive, and indifferent to geographic remoteness. Mining and heavy industry are constrained by terrain and environmental sensitivity. Large-scale manufacturing faces connectivity deficits and input cost disadvantages. A Pashmina shawl requires no highway. A digital artisan marketplace requires bandwidth and a bank account. A curated cultural tourism experience requires, above all, a story and Kashmir has stories older than most modern nations. Tourism, handicrafts, and digital content can form an interlocking ecosystem where each reinforces the other’s value through the tourist who experiences Kashmir returns as a consumer of its crafts; the craft is documented and narrated online, becoming a cultural asset that draws more visitors; the filmmaker who records the valley’s oral traditions preserves and monetises simultaneously.
The fragilities demand equal candour, because taking this opportunity seriously means confronting them without flinching. J&K’s handicraft exports grew at a compound annual rate of just 3.62 per cent between 1999 and 2018, a figure that suggests an industry advancing on the fumes of tradition. The branding deficit is acute, with Kashmiri crafts widely recognised but poorly defended, routinely imitated by cheaper manufacturers who capture market share without bearing the artisan’s labour or the region’s cultural overhead. Supply chains remain fragmented, with multiple intermediaries compressing the artisan’s realised margin to a fraction of the retail price. Beneath all of this lies a subtler threat that the gradual hollowing of authenticity as crafts are simplified and stripped of their contextual grammar to meet the short attention spans of global marketplaces. A Kashmiri carpet that takes six months to knot cannot compete on price with a machine-loomed facsimile from a cheaper geography. Its only durable advantage is irreducible authenticity, and that advantage is exhausted the moment the story around it goes silent.
A credible roadmap must be institutional before it is aspirational. Craft clusters organised as producer collectives, with shared design facilities and export logistics, would restructure the supply chain in the artisan’s favour. An IP enforcement architecture that treats GI litigation as a budget line rather than an administrative courtesy would close the gap between legal protection on paper and competitive protection in practice. Digital skilling programmes that equip J&K’s young population to produce content through film, music, and design would translate local cultural capital into globally tradable assets. And patient capital, from public finance institutions willing to lend against creative assets, would bring artisans into the formal economy without requiring them to surrender the informality that keeps their work alive. These are the boring prerequisites that every country which has succeeded in this domain quietly built first.
The Incomplete Reckoning
The Orange Economy is no exception to the iron law that promising frameworks tend to arrive before the institutions required to realise them. The risk facing India, and J&K more acutely, is celebrating the idea of creativity while neglecting the unglamorous scaffolding that converts imagination into income. Countries that have genuinely succeeded, such as South Korea, Denmark, Jamaica, and Colombia, did so through sustained and often tedious institutional commitment that comprised curriculum reform, export promotion agencies, IP litigation funds, cluster development grants, and the painstaking work of connecting artisans to accountants, weavers to lawyers, and storytellers to streaming platforms.
The carpet on a Srinagar loom takes months to complete, each knot tied by hand, each colour chosen against a pattern refined over generations. It is, in the most literal sense, time made beautiful. The question is whether the economy around it can be made beautiful too, with equivalent patience and precision. The answer remains unwritten, which is, of course, where the creativity begins.
(The author is a pracademic working on government policy and public institutions. Ideas are personal.)
