The vibrant tourism sector in Ladakh is reeling from significant losses following recent violent incidents that severely disrupted daily life in Leh. Industry leaders are now urgently requesting additional financial support to help the sector regain its footing.
Hoteliers, tour operators, and transporters collectively expressed that the civil unrest, compounded by an already slow tourist season, has delivered a devastating blow to local businesses. They stressed the critical need for immediate intervention through special measures, including interest subsidies during moratorium periods and comprehensive loan restructuring.
This pressing demand was formally submitted in a letter to the chairman of the Union Territory Level Bankers Committee (UTLBC) by a coalition of local tourism bodies, including the All Ladakh Hotel and Guest House Association, All Ladakh Tour Operators Association, and various taxi, tempo, and biker unions.
Leh experienced violent clashes on September 24, 2025. These incidents occurred amidst protests advocating for statehood and the granting of Sixth Schedule status for Ladakh.
The clashes tragically led to four fatalities and numerous injuries, which in turn resulted in the imposition of a curfew and the suspension of mobile internet services. Notably, climate activist Sonam Wangchuk, a key leader of the protests, was detained in the aftermath of the violence.
Although most restrictions were lifted after a week, the unfolding situation has severely impacted the region’s tourism industry.
In their letter, the stakeholders acknowledged the Finance Department’s September 19, 2025 notification, which recognized Ladakh as a disturbance-affected area since April 22 (following the Pahalgam terror attack) under RBI’s Chapter 7 guidelines on relief measures. They expressed gratitude for the ongoing development of relief packages, specifically mentioning the proposed one-year moratorium extension.
However, they emphasized that the tragic incidents of September 24 have plunged Ladakh’s tourism and trade sectors back into profound financial difficulty. With the tourist season effectively concluded and many businesses preparing to close for winter, local entrepreneurs and operators find themselves unable to meet even their most basic financial obligations, the letter stated.
Tourism industry representatives highlighted that the extended disruption and the almost complete cessation of tourist activities have left thousands of livelihoods in jeopardy. They underscored that Ladakh’s tourism is far more than just an economic sector; it supports over 70% of the region’s population, directly or indirectly. As winter approaches and operations cease for several months, urgent financial intervention is paramount to avert defaults, permanent business closures, and lasting economic devastation.
While acknowledging the moratorium extension as a positive step, the letter noted that accruing interest during this period would only exacerbate the financial strain on already struggling borrowers. “We therefore advocate for an interest-free moratorium, or alternatively, an interest subvention for a minimum of 12 months, to provide authentic financial relief,” the letter articulated.
The stakeholders further called for a mandatory restructuring of all tourism-related loans across various sub-sectors, including hotels, guest houses, taxis, bikes, transporters, tour operators, and small traders. This restructuring would ensure that repayment schedules are revised without penalties or the reclassification of loans as Non-Performing Assets (NPAs).
Many local entrepreneurs rely on consistent access to credit for their seasonal operations. Therefore, the stakeholders requested that all accounts benefiting from these relief measures be safeguarded against CIBIL score downgrades or NPA classifications, thereby preserving their future creditworthiness.
The letter concluded with a sincere appeal to the UTLBC and relevant financial institutions to swiftly finalize and disseminate the comprehensive relief package, emphasizing its crucial role in protecting both livelihoods and fostering financial stability throughout the Union Territory.