The purpose of this research paper is to examine the Impact of Religious Tourism on the development 'smokeless industry' that has the potential of igniting significant economic activity, thus creating employment,generating investment, and reducing poverty. The present study is descriptive in nature. Data were collected in view of facts reported in the secondary sources, including news items, national and international reports on tourism,books, journals as well as information gathered from interaction with the local people. The present study not only underscore the prospective implications of religious tourism in the country but also explores the challenges pervading the religious tourism sector in Pakistan. The findings of the present research paper indicate the below-par performance of concerned agencies was the main hindrance to promote tourism in Pakistan. Moreover, the key issues are non-development and maintenance of tourist spots, negative projection of security situation, visa restrictions, inadequate infrastructure, sub-standard transportation, and poor health services, which are badly affected religious tourism. This research paper will be assisted the policymakers in improving travel procedures and providing safety and security to the tourists in Pakistan.