Tourism is considered as the mainstay of Kashmir’s economy. In the last three years, the government has been consistent in its efforts to improve the tourism scenario in the valley by investing in the UT to create necessary tourism infrastructure by building facilities and identifying new places and amusements. Many experts are of the opinion that tourism being one among the key economic sectors, there is a need to maximize tourism potential of Kashmir to drive the inclusive economic growth by various means including employment generation. In both developed and developing nations, tourism policies are becoming major concerns to understand the relationship between tourism spending and economic development. It is an undeniable fact that effective tourism serve as a potent engine of economic development. Kashmir valley is an ideal tourist destination for both domestic and international tourists. The valley is abode for nature lovers due to its natural scenery, mesmerising landscape, beautiful meadows, and fantastic environment. If properly promoted, tourism has the potential to change the fate of the UT and diversify its economy; not only can it accommodate an increasing number of people, but it will also aid in the expansion of the tourism industry. Aside from traditional tourist destinations, new destinations must be incorporated into the tourist map and new concepts such as sustainable tourism must be developed without disturbing the fragile ecosystem. Also, there is a need to sensitize the policy makers and tourism stakeholders towards the importance of sustainability tourism for destination development and identify areas of eco tourism initiative that can be undertaken across the various regions of Jammu and Kashmir. Travel is evolving rapidly all over the world and there is a visible shift from mass tourism to niche tourism. The UT’s tourism industry needs to rise to this level and evolve into a ‘niche destination’. There is a need to focus on evolving and promoting niche tourism and destinations with focus on orchard tourism and wedding destination tourism among others. There is a need for adopting a policy of responsible tourism without compromising the environment and ecology which is the core issue that drives tourism industry. Eco-tourism is a significant contributor to resource conversation and environmental protection. We have the natural beauty that offers great tourism potential but the government must work on improving the facilities. There is also the need for multiple training initiatives as education and training are critical in order to improve service standards that would result in the delivery of exceptional experiences. If the government and the concerned departments make adequate arrangements Kashmir can become a permanent and preferred tourist destination. This can prove highly beneficial to the business in Kashmir.