Tourism is rapidly emerging as major and critical sector of economy around the globe, as the ability of tourism to earn foreign exchange and to raise income and employment has been well recognized in economic literature. Also called as ‘Switzerland of East' and ‘paradise on earth’, JammuandKashmir -the northern most state of India, has a huge potential for tourism asit is the land of sky-touching snowclad mountains, fresh springs, extensive green lush meadows, sprinkling lakes and valleys(especiallyNubra, Bangus, and Lolab) besides a huge number of pilgrimage  and archeological sites.

However ,the onset of cross-border terrorism and insurgency since1989 has led to massive  socio-economic downswing with economy as it major causalityin General and tourism in particular. There is a direct relationship between armed conflict and economy of the state as armed conflict has led to decline inemployment,handicraft business, agriculture production and tourismcount ,even the basic infrastructure like power supply, roads, communication system and drinking water remain poorbecause resources are diverted to counter-terrorism activities .Tourism which was once considered as backbone of Kashmir economy saw a major dipsince 1989 with its share in stategross domestic product (GDP)  falling  below 10%.Terrorism often causes cancellations and withdrawal of travel plans to certain destinations thus indicating the tourism industry as extremely indestructible .In the proposed study we have tried to analyse and identify the impact of this armed conflict and cross border terrorist  subversive activitieson the economy of state with special reference to tourism sector. The proposed study byemploying the help from primary and secondary sources will also seek to analyse psychological barriers affecting tourists to arrive here, besides finding the relationship between presence of security forces and inflow of tourists.