[3][4][5] The tunnel lies near Gagangir in the Ganderbal District of the Indian Union Territory of Jammu and Kashmir, and has great strategic importance for India as it will provide quicker and year-long access to Zoji-la.

The completion of the Z-Morh tunnel will also significantly reduce the travel time between Srinagar and Leh as commuters will no longer need to stay overnight in Kargil to compete the trip.

The tunnel will increase social and economic development throughout the region and boost tourism in Sonamarg, which boasts attractions including the Thajiwas Glacier and activities such as whitewater rafting on the Sind River.

The work was suspended by the construction contractor in July 2018 due to the financial stress of the concessionaire (IL&FS Group).

The Project Authority (NHIDCL) foreclosed the concession the agreement/contract with Srinagar Sonamarg Tunnelway Limited and reinvited bidding for the construction of the balance work in June 2019.