Ladakh Tourism Stakeholders Seek Financial Relief After Violence Hits Industry

Ladakh tourist stakeholders have demanded financial relief measures to help the tourism industry recover from growing losses following recent violent incidents that disrupted the peace and daily life in Leh.

According to hoteliers, tour operators, and transporters, the turmoil, when combined with an already weak tourist season, has severely damaged local enterprises, warranting urgent intervention through special measures, including comprehensive loan restructuring and interest subvention during the moratorium period.

PTI reported that in a letter to the chairman of the Union Territory level bankers committee (UTLBC), the All Ladakh Hotel and Guest House Association, All Ladakh Tour Operators Association, Leh Cooperative Taxi Ltd, Tempo, and biker unions collectively made the demand.

Following demonstrations in favour of demands including statehood and Ladakh's inclusion in the Sixth Schedule, Leh saw violent skirmishes on September 24.

Four people were killed and numerous more were injured in the violence, which led to curfews and the suspension of mobile internet services.  Sonam Wangchuk, a climate activist who led the demonstration, was arrested after the violence.

After a week, the majority of the limitations were lifted, but the tourism sector suffered as a result of the new circumstances.

“We deeply appreciate the finance department's notification on September 19 declaring Ladakh as affected by disturbances effective April 22 (following the Pahalgam terror attack) under Chapter 7 of the RBI (Relief Measures by Banks in Areas Affected by Natural Calamities) Directions. We are grateful for the subsequent relief measures being formulated, including the one-year Moratorium extension.

“However, the tragic events of September 24 have once again pushed Ladakh's tourism and trade sectors into severe financial distress. With the season now effectively over, and most businesses shutting down for winter, the ability of local entrepreneurs and operators to service even basic dues has become impossible,” the letter read.

The tourism players said the prolonged disruption, coupled with a near-total halt in tourist activity, has left the livelihoods of thousands hanging by a thread.

“Ladakh's tourism industry is not merely an economic sector - it sustains over 70 per cent of the region's livelihoods, directly or indirectly. With the onset of winter and operations halted for months ahead, urgent financial intervention is critical to prevent defaults, closures, and long-term economic damage,” they said.

According to PTI, despite the extension of the moratorium being a welcome relief, the letter stated that the burden on already distressed borrowers will still be increased by the accumulation of interest during this time. In order to provide true financial relief, we thus ask that the moratorium be made interest-free or that an interest subvention be given for a minimum of 12 months. In order to allow for revised repayment schedules without penalty or reclassification as non-performing assets (NPAs), the stakeholders also called for a mandatory restructuring of all tourism-related loans across all sectors, including hotels, guest houses, taxis, bikes, transporters, tour operators, and small traders.

In order to ensure that their future credit worthiness is maintained, they claimed that many local business owners rely on ongoing loan availability for seasonal operations. They asked that all accounts taking advantage of these relief measures be shielded from CIBIL score downgrades or NPA categorisation.

“We sincerely urge the UTLBC and concerned financial institutions to expedite the formulation and circulation of the final relief package to safeguard both livelihoods and financial stability in the Union Territory,” the letter said.