₹21,000 Crore On The Line: Pahalgam Triggers Existential Crisis For Kashmir's Tourism Industry

The April 22 panic onslaught successful Pahalgam, which near 26 visitors dead, is being seen arsenic a devastating inflection constituent for Kashmir—not conscionable arsenic a calamity of lives lost, but arsenic a perchance crippling rustle to an system that had only precocious started showing signs of a meaningful revival.

The effect of nan onslaught is now expected to resound crossed sectors, peculiarly tourism, and could derail years of dependable economical advancement built connected improving security, investor confidence, and visitant footfall.

Until nan attack, Jammu & Kashmir's economical trajectory had been robust. The region’s existent GSDP for 2024-25 was projected to turn astatine 7.06%, pinch a nominal GSDP estimated astatine ₹2.65 lakh crore—a reflection of accordant momentum. Between 2019 and 2025, nan Union Territory clocked a compound yearly maturation complaint of 4.89%, while per capita income was expected to touch ₹1,54,703 successful FY25, up 10.6% year-on-year.

Much of this maturation was underpinned by comparative stability. Terror incidents had plunged from 228 successful 2018 to conscionable 46 successful 2023—a astir 99% decline. It was this bid dividend that fuelled investment, tourism, and a renewed economical narrative.

The astir contiguous and visceral harm has deed tourism, a assemblage that contributes 7–8% to Jammu & Kashmir’s GSDP according to nan charismatic Economic Survey. The Economic Survey and fund documents do not supply a circumstantial rupee worth for nan sector, but pinch nan nominal GSDP astatine ₹2.65 lakh crore, this places nan yearly worth of tourism for nan full Union Territory successful nan scope of ₹18,500–21,200 crore. The authorities has group an eager extremity to summation tourism’s stock of GSDP from 7% to astatine slightest 15% successful nan adjacent 4–5 years.

The Pahalgam onslaught occurred astatine nan tallness of nan highest tourer play (April to October), triggering a activity of cancellations that threatens to decimate earnings.

The timing couldn’t person been worse. Kashmir was riding a high: tourer arrivals had climbed from 34 lakh successful 2020 to a grounds 2.36 crore successful 2024, including 65,000 overseas tourists. The 2025 play had opened beardown too, pinch 8.14 lakh visitors to Srinagar’s Tulip Garden successful conscionable 26 days.

Now, that momentum is successful jeopardy. Travel agents study up to 90% cancellations successful immoderate segments, peculiarly from eastbound India, wherever states for illustration West Bengal relationship for a important 30% of yearly inflows. Bookings of astir 300 visitors per time from Bengal are now successful doubt.

Kashmir’s tourism ecosystem is vast: complete 1,500 houseboats, 3,000+ edifice rooms, countless taxi operators, circuit guides, pony handlers, and handicraft sellers each dangle connected it. Many person taken loans aliases sold assets to put successful this increasing opportunity. The onslaught has abruptly converted these maturation bets into imaginable liabilities. "We will incur dense losses," a section usability said, reflecting wide anxiety.

The fallout isn’t constricted to tourism alone. The onslaught threatens to resistance down GSDP projections, halt infrastructure projects, and scare disconnected some home and world investors. Kashmir, erstwhile sounded arsenic a rising finance destination, now faces a credibility crisis. FDI inflows could slow, and existent property investments successful tourism-linked areas whitethorn freeze.

Ancillary sectors—from carrier and banking to unit and handicrafts—are already emotion nan strain. Loan defaults from tourism-linked businesses are expected to rise, putting unit connected section banks. Even sectors for illustration agriculture and horticulture, which trust connected seasonal request surges, could spot knock-on effects.

The unemployment rate, which had improved to 6.1% successful 2023-24 from 6.7% successful 2019-20, whitethorn reverse, and nan start-up ecosystem—which saw a 287% summation successful DPIIT-registered ventures since 2020—could stagnate.

What makes nan Pahalgam onslaught peculiarly damaging is its deliberate targeting of tourists—a rarity moreover successful nan Valley’s long, troubled history. Unlike erstwhile incidents that avoided civilians, this battle punctures nan cautiously cultivated communicative of normalcy and hospitality that had brought Kashmir backmost onto nan recreation map.

Published on: Apr 23, 2025 7:18 PM IST