Tourism in India has not been harnessed to its fullest potential. Though it is growing at average growth rate of about 4 %, the challenges faced by stakeholders in the tourism sector on a routine basis due to policy paralysis of weak and conflicting Tourism 1 policies of the Government of India is plaguing the boom in this sector. The State of Sikkim has shown an outstanding and consistent growth of tourist arrivals. It is by the far one of the choicest destination of tourists in the last couple of years, especially tourist visiting the North East of India. The State has received the acclaim from all quarters and has bagged Tourism awards presented by the MoT, GoI in four different categories in 2012. Lonely Planet has named the state as the best region to visit in 2014. The state has already seen a quantum leap in tourist arrivals since February this year and the number of foreign tourist arrivals is continuously surging.  This paper tries to briefly study the performance of the State of Sikkim in tourism sector and forward looking policies and initiatives taken up by the Government of Sikkim which has made Sikkim one of the best travel destinations in India. The paper also tries to find the policy gaps and suggest appropriate policy recommendations.