Some of the major tourist destinations in India are also reeling under terror. This study examines the causal relationship between terrorism and tourism and economy impact in the Indian states of Jammu and Kashmir, Assam and Manipur using the asymmetric nonlinear autoregressive-distributed lag (NARDL) approach. The study is an attempt to investigate the ‘tourism–terrorism–economy’ relationship which has hitherto been not widely studied. The estimates based on the Granger causality approach demonstrate that there is causality among terrorism, tourism and economic growth (proxied by state gross domestic products—SGDP) in the short run for all the three study states. The results indicate positive relation between SGDP and tourism in all the three states and between SGDP and terrorism in Assam and Manipur. However, the relation between SGDP and terrorism is negative for Jammu and Kashmir. The results indicate that the relation between the three study variables is highly contextual and cannot be generalized across tourist destinations.
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