The terror assault in Pahalgam had a significant impact on Kashmir's thriving tourism industry


Kashmir, a region once synonymous with conflict, had started to emerge from the shadows of its troubled past. The tourism sector, in particular, was a symbol of hope, gradually regaining its footing after years of instability. However, the terrorist attack in Pahalgam on April 22 has not only claimed lives but has also brought a devastating halt to the region's economic recovery. Where there should have been the laughter of tourists, there now lingers the eerie silence of fear, which could cost Kashmir dearly.

The attack has already triggered a ripple effect throughout Kashmir’s economy, most notably its tourism sector, which is a lifeline for many. According to the state’s Economic Survey, tourism contributes between 7% and 8% of the region’s Gross State Domestic Product (GSDP), with an estimated value of between Rs 18,500 crore and Rs 21,200 crore annually. The state government had ambitious plans to increase this contribution to 15% in the next 4-5 years, but the Pahalgam attack has thrown these plans into jeopardy.

Tourism was at the center of the region's post-conflict revival. Over the past few years, Kashmir had seen a steady increase in the number of visitors. In 2020, tourist arrivals stood at 34 lakh, and by 2024, they surged to a record 2.36 crore, including 65,000 foreign tourists. Early signs of a promising 2025 tourist season were already visible, with the Tulip Garden in Srinagar alone attracting over 8 lakh visitors in just 26 days. Yet, in the wake of the attack, bookings are being canceled, and many fear that the rest of the season may be ruined, impacting the livelihoods of those who rely on tourism for their income.

The tourism industry's downturn has broader implications. Other sectors tied to tourism, such as retail, handicrafts, shawl and carpet weaving, and small businesses, are also at risk. Dr. Manoranjan Sharma from Infomerics Valuation and Ratings Ltd warned that the attack could undo years of economic progress. Terror-related incidents had dramatically decreased from 228 in 2018 to just 46 in 2023, while economic growth had been on the upswing. The region's GSDP was expected to grow by 7.06% in FY25, and per capita income had risen by 10.6%, reaching Rs 1,54,703.

The growth in markets like Sopore, where the annual turnover reached Rs 7,000 crore in 2024, had provided vital support to farmers and traders across districts like Kupwara, Bandipora, Baramulla, and Budgam. But with the drop in tourist demand, this source of income could be severely affected. The damage isn't just financial; it's also personal. Jobs linked to tourism, including those in hotels, restaurants, travel agencies, and transport services, are now at risk. Many people who have relied on these sectors for employment may face uncertain futures.

The uncertainty brought on by the attack also threatens Kashmir's budding start-up sector. Since 2020, the number of DPIIT-registered start-ups has surged by 287%. However, this growth could stall if the situation remains tense, discouraging new investments and opportunities for economic expansion. Unemployment, which had dropped from 6.7% in 2019-20 to 6.1% in 2023-24, could rise again if sectors like tourism continue to suffer.

As Kashmir grapples with the aftermath of the attack, the immediate damage is clear: livelihoods are under threat, businesses are at risk, and the broader hopes for economic revival may be delayed or reversed. The region's recovery from conflict had been hard-won, and now, it faces the daunting task of rebuilding its economy amid renewed fears and uncertainties.


 

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