Ladakh tourism bodies seek financial relief to mitigate crisis after Leh unrest

In the aftermath of recent violent incidents that disrupted normal life in Leh, tourism stakeholders in Ladakh have called for additional financial relief measures to help the sector recover from mounting losses.

Hoteliers, tour operators and transporters said the unrest, coupled with an already weak tourist season, has dealt a severe blow to local businesses, warranting urgent intervention through special measures, such as interest subvention on the moratorium period and comprehensive loan restructuring.

The demand was jointly raised by All Ladakh Hotel and Guest House Association, All Ladakh Tour Operators Association, Leh Cooperative Taxi Ltd., tempo and biker unions in a letter addressed to the chairman of the Union Territory Level Bankers Committee (UTLBC).

Leh witnessed violent clashes on September 24, 2025, following protests in support of demands such as statehood and Sixth Schedule status for Ladakh.

The violence resulted in the death of four persons and injuries to scores of others, prompting the imposition of curfew and the snapping of mobile internet services. Climate activist Sonam Wangchuk, who was among those spearheading the protest, was detained following the violence.

While most of the restrictions were eased after a week, the emerging situation dealt a blow to the tourism industry.

“We deeply appreciate the Finance Department’s notification on September 19 [2025] declaring Ladakh as affected by disturbances effective [from] April 22 [following 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% 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.

The letter said that while the moratorium extension is a welcome relief, the accumulation of interest during this period will still increase the burden on already distressed borrowers. “We therefore request that the moratorium be made interest-free, or that an interest subvention be granted for at least 12 months, to ensure genuine financial respite,” they said.

The stakeholders also requested a mandatory restructuring of all tourism-related loans across sectors, including hotels, guest houses, taxis, bikes, transporters, tour operators, and small traders, so that repayment schedules are revised without penalisation or reclassification as Non-Performing Assets (NPAs).

They said many local entrepreneurs depend on continued access to credit for seasonal operations, requesting that all accounts availing these relief measures be protected from CIBIL score downgrades or NPA classification, ensuring their future creditworthiness remains intact.

“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.