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Escalation of human–wildlife conflict (HWC) is a barrier to the conservation of ecological corridors across the globe. The existing mechanisms to counter HWC are either economically and socially taxing, or ineffective for long-term management. We assessed HWC in the corridor linking the Rajaji and Corbett Tiger Reserves in Uttarakhand, India, and its drivers, along with the benefits derived by local communities from the forest. We designed an innovative incentive-based mitigation mechanism to encourage coexistence of people and wildlife around the corridor. Costs incurred due to conflict and benefits derived from the forest were assessed using semi-structured questionnaire-based personal interviews (n = 757) with representatives from forest dependent households (hh). Fuelwood (1678.7 ± 131 kg hh−1 year−1), fodder (4772 ± 186 kg hh−1 year−1) and green/dry grass (3359 ± 104 kg hh−1 year−1) contributed 3 ± 1%, 6 ± 0.5% and 9 ± 1%, respectively, to the annual income of dependent households. 69% of the households practising agriculture reported crop damage by wild animals, 19% of the households that owned livestock reported livestock loss, and 1.58% reported attack on humans resulting in injuries. The cost incurred due to crop raiding and livestock depredation was US $ 159.83 ± 1.0 hh−1 year−1 and US $ 229.32 ± 34.0 hh−1 year−1, respectively. Crop loss was positively associated with the number of crops grown per season and cultivation of sugarcane, wheat and pulses, and negatively with distance from forest and cultivation of fodder and finger millet. Livestock depredation was negatively associated with distance from forest and positively with number of livestock owned, primarily calves. The accounting profit from cultivating a hectare of land, in the absence of crop depredation by wild animals, was estimated at US $ 3571.84 ha−1 year−1 and US $ 361.44 ha−1 year−1 for the plains and hills, respectively. This value can be used to calculate the payments to be paid to local communities to encourage them to adopt HWC resistant agricultural and pastoralism practices. The net present value of benefits from participating in the payments to encourage coexistence programme for 5 years, discounted at 12%, was US $ 12,875.7 ha−1 for the plains and US $ 1302.9 ha−1 for the hills.

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