A much too familiar story for all beautiful but underdeveloped places in India. In the case of Andaman & Nicobar islands, this post on "Tourism" captures the ills that plague the administrative leadership. Tourism happens to be a significant economic activity of the islands.
At the fag end of the development spectrum lie the tribes of A & N islands. Jarawas, Onge & Sentinelese. Some of them like the Sentinelese are completely isolated from civilisation. A fantastic video on the first-contact (as claimed) made with them shows up in this informative post from Mathilda's Anthropology Blog . Mathilda comments on Sentinelese tribals' liking of coconuts and on the couple's preference for holding hands. Some readers talk of exploitation of Jarawas (pictured here and taken from Mathilda's blog) at the hands of greedy tour operators & administrative accomplices.