The Defence Minister also said that the armed forces have to be firm with terrorists and described the Kashmir issue as "very sensitive" and nuanced.
The death of R Thirumani, a 22-year-old resident of Chennai, in a stone throwing incident near Narbal on the outskirts of Kashmir yesterday was "absolutely unfortunate", Ms Sitharaman said.
The incident comes just as the tourist season in the state begins to gather pace with the summer setting in in large parts of the country.
"I don't know whether it (the incident) was inadvertent or (committed) knowingly but it is completely condemnable," the minister told reporters at an interaction in New Delhi.
"I am sure the chief minister (Mehbooba Mufti) herself is keen on getting more tourists to Kashmir because that will also help in restoring normalcy. So, if that has been a stated desire, for a stone pelting incident to have hurt and killed a tourist, it's certainly not very conducive to that," Ms Sitharaman said.
She said there is need to understand that the issue is very sensitive and has a great deal of nuance.
"You can't hold the armed forces responsible for being firm with terrorists. We need to be firm with terrorists. So, we have to understand first about putting everything back at the doorstep of the army... They have to be firm...," she said.
Ms Sitharaman added that at the same time there needs to be free and safe movement of tourists so that normalcy can be restored in the valley.
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