Pahalgam Terrorist Attack: A Big Blow To Jammu & Kashmir’s Economy, Tourism-Investment & Growth Hit Hard After April 22 Incident

A terrorist attack on April 22, 2025, in Pahalgam, Jammu and Kashmir, left 26 tourists dead. This incident, the worst since 2019, has not only brought deep sorrow to the nation but also dealt a serious blow to the region’s economy. Jammu and Kashmir, which was showing strong growth in tourism and investments, now faces major economic setbacks.

Fall in Tourist Numbers

Tourists have started cancelling their summer trips to Jammu and Kashmir. Tourism is a major part of the local economy, making up 7–8 per cent of the region’s GDP. With fewer visitors, hotels, taxis, and small businesses are expected to suffer.

Halt in Investment Projects

Security concerns may cause ongoing and upcoming investment projects to pause. Experts warn that nearly Rs 1.63 lakh crore worth of investment could be affected.

Slower GDP Growth

In 2024–25, Jammu and Kashmir’s GSDP grew by 7.06 per cent. This growth is now likely to slow down due to the unstable environment.

Drop in National GDP Contribution

Jammu and Kashmir currently contributes about 0.8 per cent to the national GDP. A drop in tourism and investments could lower this contribution.

Per Capita Income May Decline

The region's per capita income reached Rs 1.55 lakh in 2024–25, showing strong growth in the past decade. Instability could reverse this progress.

Services Sector at Risk

About 61.7 per cent of Jammu and Kashmir’s GSVA comes from services, mainly tourism. A slowdown here can impact the overall economy.

Manufacturing May Suffer

Manufacturing makes up 18.3 per cent of the economy. Uncertainty may stop new projects, leading to job losses.

Central Project Delays

A Rs 971 crore government-approved project may face delays as investor confidence weakens.

Industrial Hopes Fade

Jammu and Kashmir was becoming a new hub for industry. The recent attack may push investors away.

Government Needs to Act

The government must build trust, improve security, and create a safe investment climate to support recovery.

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