Pahalgam terror attack leaves Kashmiris in a bind, loans to repay and a tourist season blown away

The attack, the deadliest in recent years, took place in one of the Valley’s most picturesque and world-famous destinations, casting a dark shadow over Kashmir’s booming tourism sector.

Borrowing to invest in tourism business

The Pahalgam attack may deal a crushing blow to Kashmir’s fragile economy, unravelling years of cautious optimism in the region’s tourism sector. Those who took loans or sold personal assets like jewellery and land to invest in the industry now face dire uncertainty. Hoteliers, Shikara riders, and vendors, once symbols of economic stability, may grapple with dwindling visitors and mounting debts as the violence shatters the narrative of normalcy promoted by the government.

Tourism plays a crucial role in Jammu and Kashmir’s economy, contributing 8.47% to the Union Territory’s GDP. The attack not only left tourists dead but threatened to undo years of effort in reviving the picturesque region’s reputation as a safe and welcoming destination.

Kashmir’s tourism industry, touted as the strongest indicator of “normalcy” returning to J&K, is in profound despair, with stakeholders gripped by fear of not only losing their jobs but also having to cope with devastating financial setbacks. For many, this tragedy hits at the most inopportune moment just as the region's vibrant peak tourist season was dawning, set to flourish until October.

2025 season got off to a great start

Before the attack, Kashmir’s tourism boom was on full display, with government data showing 8.14 lakh visitors flocking to Srinagar’s Tulip Garden in the 26 days following its March 26 opening.

Asia’s largest tulip garden, set against the stunning backdrop of iconic Dal Lake also attracted over 3,000 international tourists. The influx of visitors highlighted the region’s booming tourism industry, which had shown strong growth and was poised for a prosperous season.

Industry's focus has been on the domestic traveller

Following the global lockdown imposed by the Covid-19 pandemic, which saw many world tourist destinations remain off-limits, the J&K government launched aggressive promotional campaigns within India to entice domestic tourists. These efforts sparked a surge in tourism, with tourist numbers reaching record highs in recent years. For example, the official data reveals that nearly three million tourists visited Kashmir last year with the total tourist footfall in 2024 was 2.95 million, a notable increase from 2.71 million in 2023 and 2.67 million in 2022.

Similarly, compared to 37,000 foreign tourist arrivals in 2023, the Kashmir Valley, touting itself as “Paradise on Earth”, welcomed 43,000 international visitors in 2024.

Undoing government’s effort to woo foreign tourists

The attack also took place at a time when the government was actively urging countries like the UK, USA, Canada, and Australia to lift long-standing negative travel advisories that warn their citizens to “avoid all travel” to J&K. These advisories, according to tourism stakeholders in Kashmir have long dented the image of the region, discouraging foreign tourists and often leading to trip cancellations due to the unavailability of travel insurance.

On the streets and roads of Kashmir, there is growing unease that tourists, wary of terrorism threats, may quickly rethink their plans. The attack in Pahalgam has intensified safety fears, threatening to eclipse the region’s stunning landscapes and rising global allure.

The local economy, deeply dependent on the steady stream of visitors, now teeters on the brink of collapse, with hopes shattered.

Over the past few years both the Centre and the J&K government have been proactive in projecting the region as a tourist-friendly destination in an effort to signal a return to normalcy. For example, in January this year, Lieutenant Governor Manoj Sinha underscored the importance of shifting the narrative from terrorism to tourism, emphasising the immense potential Kashmir holds for travellers around the world.

While inaugurating the Z-Morh Tunnel in Sonmarg, Sinha remarked that people should talk about tourism in Kashmir instead of terrorism.

While the past few years had witnessed steady growth driven by an improved security situation, the fresh violence has triggered a wave of concern, with businesses and consumer partners starting to see inquiries about cancellations.

Using G20 presidency to showcase Kashmir

In May 2023, in a bid to boost tourism and project stability, India even hosted a G20 tourism meeting in Srinagar under heavy security. The event, first of its kind in Kashmir, was seen as a move to showcase what the government described as a return to “normalcy and peace” in the region, following the 2019 revocation of J&K’s special status under Article 370.

Following the G20 event, the J&K government hailed the meeting as a watershed moment for the region’s tourism sector, reporting a 59 percent rise in foreign tourist arrivals since the summit, which was widely seen as a catalyst for renewed global interest in Kashmir.

On the road to Amarnath

Pahalgam is also one of the two key routes leading to the Amarnath Cave, a revered pilgrimage site that draws lakhs of devotees annually.

With just two months remaining until the Amarnath Yatra, a pilgrimage that draws hundreds of thousands, the timing of the attack sharply raises the stakes, endangering not only political stability and economic lifeline but also its spiritual fabric. The Yatra is an important pilgrimage for Hindus, who trek to the sacred Amarnath Cave, believed to be the abode of Lord Shiva. Each violent incident chips away at tourist confidence and heightens fears among local communities, who worry they will bear the brunt of the fallout.

Locals express outrage

Deeply aware of the impact that targeting tourists could have on the region, residents reacted with outrage to the recent killings, taking to the streets in protest and demanding justice.

The attack, seen as a direct assault on the local economy, particularly its thriving tourism industry, sparked a unified response across the Valley. Tourism stakeholders, trade bodies, bar associations, schools, and business groups all called for a spontaneous shutdown to condemn the violence and express solidarity with the victims.