Not just tourism, entire Kashmir economy hit hard by post-Pahalgam attack slump

By Admin

22 May, 2025

Srinagar, May 21 – A tense silence hangs over the bustling lanes of Kashmir that once echoed with the footsteps of tourists and the chatter of local shoppers. The recent terror attack in Pahalgam has triggered a wave of fear and uncertainty that is rippling far beyond the tourism sector, shaking the very foundation of the Valley’s economy.

While tourism has traditionally played a modest role in Jammu and Kashmir's GDP, it acts as a powerful catalyst for several interlinked industries. The aftermath of the Pahalgam incident and the heightened hostilities between India and Pakistan have caused tourist footfall to plummet, leading to mass cancellations in hotels and travel bookings. But the real damage goes much deeper.

A Chain Reaction Across Sectors

“There is a business slump post the Pahalgam attack, the tourism being the worst hit, but so are the other sectors of the economy,” said Javid Tenga, President of the Kashmir Chamber of Commerce and Industry (KCCI). He emphasized that tourism, while not the largest economic contributor, supports a vast network of informal and seasonal employment. “When tourists come, it’s not just about hotels or travel agencies. Local cab drivers earn, handicraft sellers make profits, restaurants fill up, and even vegetable vendors do better. That entire chain is now broken.”

In popular tourist areas such as Lal Chowk, once buzzing with life, the streets are now eerily quiet. Shopkeepers report over a 70% drop in footfall. Meanwhile, transporters, especially those tied to tourism, such as taxi drivers, shikara operators, and pony handlers in Gulmarg and Pahalgam, find themselves without work for days. Many are staring at the grim possibility of defaulting on vehicle loans as their earnings dry up.

Broader Economic Distress

The economic distress isn't limited to sectors directly linked with tourism. Muhammad Yaseen Khan, President of the Kashmir Traders and Manufacturers Federation (KTMF), pointed out that the broader business environment was already vulnerable before the attack. “There is a business slump, but we cannot attribute it just to the decline of tourist arrivals. Developmental activities are not taking place at the pace they should be. Many infrastructure projects have been stalled, and that too is affecting confidence and circulation of money in the market.”

He warned that the sense of economic instability was growing and urged the government to act swiftly. “Relief measures, tax waivers, and support for small traders are critical at this stage.”

The Human Cost of Economic Paralysis

Economists assert that the impact of losing a tourist season in Kashmir stretches far beyond hotel occupancy rates. It means lost wages, reduced household spending, and a growing number of informal workers without income. “The economy here is highly sensitive to perception and peace. When either is disturbed, livelihoods are the first casualty,” said one economist.

So far, there has been no formal relief package announced by the administration. Business leaders from various sectors have submitted memoranda, appealing for financial support, including soft loans, debt moratoriums, and sector-specific aid to help prevent irreversible damage.

“There have to be some measures now—not just for tourists but for investors and traders. We cannot afford to let this crisis deepen. If the summer season is lost, the damage will take years to repair,” warned Tenga.

A Call for Immediate Government Intervention

With each passing day, the absence of tangible support is deepening the crisis. The roads in Kashmir may remain open, but commerce, confidence, and hope have stalled. Business leaders and common citizens alike are now pinning their hopes on government intervention to revive the economy and restore stability.

The Valley waits — not just for tourists to return, but for a coordinated economic revival plan that can breathe life back into its struggling markets.