Kashmir is one of the most preferred destination of national and international tourists. However, considering the description of the valley, which is primarily a mountainous region and hence an entirely sensitive area, significantly negative impacts are produced by even the slightest negative aspects attached with tourism industry operating therein. Present development at the cost of future is not acceptable; thus the tradeoff between environment and economy is one of the biggest aspects of sustainable tourism. This study focuses on biophysical carrying capacity which deals with the extent to which the natural environment is able to tolerate external interference and with creating a systematic balance between the negative effects of tourist influx against its socio-economic benefits. The outcomes of the analysis show that the valley has a tremendous potential to absorb tourism, but at the same time the results propose that for increasing human welfare we have to set environment at priority and limit tourism to the carrying capacity of the region; promote sustainable tourism.

Keywords: Tradeoff; Carrying Capacity; Natural Habit; Sustainable Tourism; Regression; R-square.