The Himalayan Mountains are geodynamical important, featuring a wide climatic range with a rich diversity of flora, fauna, human communities, culture, and social set-up. In recent decades, due to constant anthropogenic pressure and considerable changes witnessed in the climate of the region, species of this region are threatened. Here, we assessed the impact of nomadic settlement and associated disturbances on plant species composition, diversity parameters, ecosystem properties, and fire incidence in high-altitude forests of Western Himalaya, India. Based on the distance between nomadic settlement location and forest, we classified forest as near nomadic settlement (NNS) or away nomadic settlement (ANS) forest types. We found a significant variation in plant species composition between forest types. Three species, namely, Sibbaldia cuneata, Poa annua, and Abies pindrow, contribute 25% of the cumulative variation in plant species composition. Studying live plants, we found a significant difference only for density, in which ANS had a higher average density than NNS. Considering dead plants, we found a significant difference in all nine plant-related parameters evaluated between sites. NNS had a higher value of all parameters evaluated, except for height, which was higher in ANS sites. ANS forest type show 1.3 times more average carbon stock (160.39 ± 59.03 MgCha−1; mean ± SD) than NNS forest type (120.40 ± 51.74 MgCha−1). We found a significant difference in plant diversity evaluated between forest types. ANS had higher values of Margalef and Fisher diversity but lower values of evenness. We found that NSS had significantly higher values of fire incidences, whereas ANS has a higher normalized differential vegetation index and enhanced vegetation index. Overall, our study showed that species composition, diversity, and fire incidence are strongly impacted due to nomadic settlements. These findings are paramount for designing appropriate livelihood options for indigenous communities and management policies of the long-term forest harvest to achieve global goals and the UN Decade on Ecosystem Restoration targets (2021–2030) to protect the sustainable development of forest mountainous regions.