Pahalgam Attack Casts Shadow On Kashmir’s Tourism Boom, Experts Warn Of Economic Setback
The Pahalgam attack aims to "sabotage Kashmir's 7.8% GDP growth", one of the analysts said.
The Pahalgam terror attack is expected to significantly impact tourism and the economy of Jammu and Kashmir, according to Madan Sabnavis, chief economist at Bank of Baroda. "It will take a lot of work to rebuild the trust, which people need to have before going to Kashmir," he told NDTV Profit.
The attack in Pahalgam, which claimed the lives of 26 persons, has triggered a wave of cancellations of tour bookings in the Kashmir Valley. Hundreds of visitors presently in the region have begun leaving, with authorities facilitating their safe return to home states.
Official data shows Jammu & Kashmir witnessed a historic footfall of 2.35 crore tourists in 2024—up from 2.11 crore in 2023 and 1.88 crore in 2022. This included domestic travelers, pilgrims to the Amarnath Yatra and Vaishno Devi, and around 65,000 foreign tourists, news agency PTI reported, citing the data.
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Tourism Sector Hit Hard
The steady growth in tourist numbers had been hailed by economic surveys as a sign of normalcy returning to the region, driven by better infrastructure, improved connectivity, and aggressive promotion by the government. But the Pahalgam attack threatens to reverse these gains.
"The whole of Kashmir is in mourning since yesterday after hearing of this gruesome incident," said Rauf Tramboo, president of the Travel Agents Association of Kashmir. "We had a peaceful environment in the past few years, which helped us to grow our tourism industry."
Tramboo noted that in 2024, tourism was at its peak. "In Kashmir, we have only two viable options of income—horticulture and tourism. In the last few years, due to tourism growth, many people moved away from horticulture and built hotels near their orchards."
Fear Psychosis To Hit Growth
Post abrogation of Article 370, there was peace in Kashmir, said Ayjaz Wani, a fellow in the Strategic Studies Programme at ORF. However, the attack in Pahalgam could derail the pace of economic growth, he pointed out.
"The attack aimed to sabotage Kashmir's 7.8% GDP growth," Wani said.
Sabnavis, echoing this concern, said, "The fear psychosis is coming. It remains to be seen whether this attack will have a deep-rooted psychological effect or if people will feel reassured by the government's actions."
