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Tourism & Hospitality

India ranks 6th according to wttc in terms of travel & tourism total contribution to gdp in 2022  .

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Quick links, unlock the marvels of incredible india, powerhouse of tourism and hospitality.

Tourism and Hospitality, as one of India's largest service industries, plays an extraordinary role in driving the nation's growth and prosperity. 

The Tourism and Hospitality sector is an integral part of the Make in India initiative, serving as a vital economic catalyst that fuels job creation and rapid development. 

It acts as a stimulant for the growth of multi-use infrastructure, including world-class hotels, resorts, exquisite restaurants, efficient transportation networks (aviation, roads, shipping, and railways), and state-of-the-art healthcare facilities. 

India proudly boasts a tapestry of geographical diversity, encompassing awe-inspiring world heritage sites and niche tourism offerings such as captivating cruise tourism, exhilarating adventure tourism, renowned medical tourism, and mesmerizing eco-tourism. These unique offerings have resulted in an exponential increase in tourist arrivals, opening up vast employment opportunities. 

The recently announced 2023 Union Budget has firmly placed tourism as a key sector in the spotlight. The Ministry of Tourism, in its mission mode, is dedicated to promoting the industry through active participation from all States, the convergence of Government Programs, and the establishment of impactful Public-Private Partnerships. This visionary approach will facilitate comprehensive development in at least 50 selected destinations through a challenge mode process. 

Recognizing the importance of diversity and gender empowerment, the tourism industry stands as a leading employer of women. The government proactively collaborates with industry stakeholders to create a conducive work environment that fosters equal opportunities and celebrates the contributions of female employees. 

The Ministry of Tourism has also designated the Year 2023 as the 'Visit India' year, an invitation to the world to witness the splendor and magnificence that our nation has to offer. 

Embracing a progressive outlook, India welcomes 100% Foreign Direct Investment (FDI) in the tourism industry under the automatic route.  

Additionally, 100% FDI is permitted for tourism construction projects, including the development of exquisite hotels, resorts, and unparalleled recreational facilities. 

For comprehensive details, please refer to the FDI Policy, which highlights the investment opportunities and guidelines in the tourism sector. 

India's tourism industry stands as a beacon of boundless possibilities, with its rich heritage, cultural tapestry, and captivating destinations. We invite you to embark on an extraordinary journey of investment and partnership, where your vision aligns with the immense potential India holds

Foreign Tourist Arrivals (till Sept 2023)

Domestic Tourist Visits to all States/UTs (2022)

Annual Growth Rate of FTAs in India (2022)

Foreign exchange earnings (FEE) from tourism (2022)

Share of India in International Tourism Receipts (ITRs) in World

6th in terms of Travel & Tourism total contribution to GDP, WTTC (2021)

2nd in terms of Travel & Tourism Employment, WTTC (2021)

54 th  on the World Economic Forum Travel & Tourism Development Index (2022)

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Government of India envisions $56 Bn forex, creating around 140 Mn jobs in tourism by 2030 through inclusive growth and  particularly focusing on cruise tourism, ecotourism and adventure tourism.   

The Indian Tourism sector ranks among the fastest-growing economic sectors in the country. The industry significantly impacts employment and drives regional development, while also creating a multiplier effect on the performance of related industries.

By 2028, India's tourism and hospitality industry is projected to generate revenue of over $59 Bn. Additionally, Foreign Tourist Arrivals (FTAs) are anticipated to reach 30.5 Mn by 2028.

In light of India's G20 Presidency and the India@75 Azadi ka Amrit Mahotsav celebrations, the Ministry of Tourism has designated 2023 as the 'Visit India Year' to promote inbound travel.

The Honorable Prime Minister has envisioned a mission mode approach to develop tourism during Amrit Kaal, with a strategic roadmap for the next 25 years. The objective is to position India as the foremost travel destination globally by the time we celebrate India@100 in 2047, creating unparalleled appeal for visitors from around the world. 

Ministry of Tourism is planning to organize a Global Tourism Investors Summit along with Central Ministries and State/UT Governments to showcase opportunities for investment and trade. The event will allow global investors to explore Indian Tourism products and services.

Union Budget 2023 Highlights:

  • 50 tourist destinations will be selected through challenge mode to be developed as a whole package for domestic and international tourism
  • Sector-specific skilling and entrepreneurship development to be dovetailed to achieve the objectives of the ‘Dekho Apna Desh’ initiative
  • Tourism infrastructure and amenities to be facilitated in border villages through the Vibrant Villages Programme
  • Unity Malls to be set up in State Capitals or prominent tourist centres

GROWTH DRIVERS

Infrastructure development.

More than half of the Ministry of Tourism’s budget is channelised for funding the development of destinations, circuits, mega projects as well as rural tourism infrastructure projects.

Hotels & Accommodation

Revenue is projected at $7.66 Bn in 2023. CAGR of 8.29% between 2023-27. 61.3 Mn potential customers by 2027

Adventure Tourism

India has 70% of the Himalayas, a 7,000+ Km of coastline, ranks 10th in total area under forest cover, and is one of the three countries in the world with both hot and cold deserts.

Medical tourism

Medical tourism and wellness retreats attract 21% of international travelers, leveraging world-class healthcare facilities and traditional healing practices.

Cruise Tourism

Cruise passenger traffic expected to increase from 0.4 Mn to 4 Mn by 2032. Increase in economic potential from $110 Mn to $5.5 Bn.

Eco-Tourism

Expected to grow at 15.7% between 2019-27 & reach $4.55 Bn. India offers unique destinations, exploration of wildlife, and pristine undisturbed natural areas.

Meetings, Incentives, Conferences, and Exhibitions

The Indian MICE market has less than 1% share currently, but with initiatives such as ‘Meet in India’, National Advisory Council for Mice, India Mice Board, MICE Tourism is projected to double in next 5 years.

Entrepreneurial Opportunities

The tourism sector has 1,300+ DPIIT recognized startups.

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The Ministry of Tourism is set to host the First Global Tourism Investors Summit in 2023 in collaboration with Central Ministries and State/UT Governments. 

This mega event aims to highlight investment and trade opportunities while providing a platform for international investors to discover India's diverse tourism products and services.  

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Recognising the potential of rural tourism in the country, the Ministry of Tourism has identified Rural Circuit as one of the fifteen thematic circuits for development under the Swadesh Darshan Scheme and is aimed at leveraging tourism as a force multiple for revitalizing the rural economy and for giving both domestic and international tourists a glimpse of rural aspect of the country.

Further, Ministry of Tourism has formulated a Draft 'National Strategy and Roadmap for Development of Rural Tourism in India - An initiative towards Atmanirbhar Bharat', which, inter alia, focuses on generating income and jobs in rural areas and empower local communities, youth and women, fulfilling the vision of Aatmanirbhar Bharat.

The GOI has identified 78 lighthouses in the country as centres of tourism, which are in the first phase under Public Private Partnership (PPP). The identified lighthouses are in Gujarat, Maharashtra, Goa, Karnataka, Kerala, Lakshadweep, Tamil Nadu, Puducherry, Andhra Pradesh, Odisha, West Bengal and Andaman and Nicobar Islands. The GOI has kick started the ‘lighthouse tourism’ project by inviting initial qualification bids to develop eight lighthouses in the first phase, at a cost of INR 128 crore, under the public-private-partnership model for 7 lighthouses.

The goal of the revamped Swadesh Darshan 2.0 Scheme is to develop sustainable and responsible tourism destinations in the country. The scheme is aimed at 360-degree holistic development with a focus on increasing self-employment, youth skilling, private sector investments, and preserving local cultures.

The strategic objectives of the Scheme are: (i) To enhance the contribution of tourism to the local economies (ii) To create jobs including self-employment for local communities (iii) To enhance the skills of local youth in tourism and hospitality (iv) To increase private sector investment in tourism and hospitality (v) To preserve and enhance the local cultural and natural resources  

Pilgrimage Rejuvenation and Spiritual, Heritage Augmentation Drive (PRASHAD) scheme focuses on developing and identifying pilgrimage sites across India for enriching the religious tourism experience. It aims to integrate pilgrimage destinations in a prioritised, planned and sustainable manner to provide a complete religious tourism experience. As on date, total number of destinations/sites identified for development under the scheme at present are 68 in 30 states/UTs.

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ET Edge Insights

Impact of travel and tourism industry on the Indian economy

tourism and economy in india

Wherein many international countries are still recovering from the pandemic repercussions. The Indian economy car is excellently speeding through it. Though many sectors are helping in progression but travelling and tourism is gearing the tempo.

India as a country is blessed with the geographical and climatic gifts of diversification, beautification and exuberance. Right from the snowy Himalayan mountainous ranges to the dense tropical forests of Kerala, India offers a wide variety of variations and suits the spirit of almost all keen travellers.

Not with, just the topography, India tends to attract visitors from in and around the world with its extremely welcoming, warm, and kind-natured citizens. “Atithi Devo Bhava” is fondly followed by Indians and the Indian government.

All of these highly adaptable features make the Indian tourism industry an economic multiplier. Increasing investment destinations, thriving digitalisation, and gen Z-friendly platforms like Travel Now Pay Later (TNPL), are making travelling and tourism a fortune wheel for the Indian growth scale.

According to the WTTC (World Travel and Tourism Council), the travel and tourism sector’s contribution to the Indian GDP will outpass the pre-pandemic levels by 2024, and this seems to get true with the G-20 delegation coming to India. The tourism sector upscaling vigorously helps the country flourish as this sector push open the gate of opportunities for many other fields. Generating jobs, enhancing skills, inspiring local artisans and tradespeople, and providing economic support to hotels, entertainment, and transportation services.

India is now outshining and gaining fame for facilitating the best of the best services in medical tourism, ecotourism, adventure tourism, cruise tourism, cultural tourism, and pilgrimage tourism and now as evident with the G-20 leadership, business travel will too become extremely popular. With so much so, it is expected that Indian tourist arrivals will reach 30.5 million and will generate approximate revenue of over 59 USD billion dollars by 2028.

The potential and growth of tourism are evident and appreciated which is why the respected finance minister Nirmala Sitharaman during her budget 2023 presentation quoted “50 tourist destinations will be selected through challenge mode to be developed as a whole package for domestic and international tourism”. The Foreign Exchange Earnings (FEEs) through tourism in India for the years 2019 to 2021 is ₹ 2,11,661cr in 2019, ₹50,136cr in 2020 and ₹65,070cr in 2021,” the ministry informed the Upper House.

The increased FTA (Foreign Tourist Arrivals) will certainly increase the potential of foreign exchange income and foreign investment in India which again in return will help the country and our countrymen to prosper.

It is not only about the financial inputs, the booming travel and tourism industries also provide a sustainable overall human development with 20 million people currently working in the Indian tourism industry, it is also anticipated that employment opportunities in the upcoming years will raise up to 140 million.

The fast pacing tour and travelling industries have improvised themselves to another level by habituating and accepting the mate ship of technology and digitisation. The online marketing of the packages and advertising even the rarest and least known tourist destinations has increased the interest of not only outsiders but of Indian explorers too, in fact, Indian tourists are predicted to be amongst the top spenders in 2023.

tourism and economy in india

Tours and travel companies are constantly putting in the hard labour to understand and move one step ahead of the trend. With staycation, workcation and many other new trends setting in, firms are trying to accommodate and provide the best travel experience to the shoppers. As tour and travel companies play an integral role in being a part of the financial development of the country. One can hope that our country too attains a lot of financial success with our government’s Swadesh Darshan 2.0 scheme.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of ET Edge Insights, its management, or its members

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Hospitality market

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You are currently viewing Tourism’s Revival: How Travel and Hospitality Impact India’s GDP?

Tourism’s Revival: How Travel and Hospitality Impact India’s GDP?

  • Post author: Supreena
  • Post published: October 24, 2023
  • Post category: General

India will soon reopen its borders to international tourism, providing relief to travel industry players while marking only an initial step toward the revival of an industry that contributes 6-7 per cent of India’s Gross Domestic Product (GDP) .

Reducing foreign arrivals back down to pre-pandemic levels remains an enormously complex challenge.

Tourism provides vital employment in developing nations. Tourism accounts for roughly 10% of global GDP and one in ten jobs worldwide; its activities may harm local communities or the environment, including pollution issues. Tourism plays an integral role in fighting poverty while simultaneously empowering women, yet growth-inhibiting barriers still prevent the tourism industry growth from providing these benefits.

The pandemic has immensely affected tourism, with travel disruption lasting far beyond expected and GDP growth slowing as interest rates decrease. Governments now feel pressure to increase investments in this industry to generate jobs, promote economic recovery, and ensure its long-term sustainability.

Tourism arrivals must be increased through targeted fiscal and monetary incentives at both central and state levels, aligning them with regional and national policies designed to support sustainability by offering incentives such as special status for accommodations to facilitate lending, expanding destination access with reduced carrying capacity requirements and offering tourists diverse choices of destinations; etc.

Tourism plays an integral role in combatting climate change and biodiversity loss while at the same time helping address income disparity within societies. Tourism benefits all stakeholders while satisfying local populations’ and cultures’ needs and safeguarding cultural heritage sites for sustainable development.

Tourism-dependent economies should search for innovative methods of revitalizing their industry and increasing visitor numbers, such as revising holiday schedules or offering unique visa options. Costa Rica extended public holiday weekends specifically tailored towards domestic tourism, while Barbados offered yacht tourism a “Welcome Stamp” visa specifically targeting yacht tourism. Government officials should remain open to exploring innovative approaches to relaunch this sector cost-effectively and sustainably.

Increased GDP

Tourism and hospitality make a substantial and impactful contribution to global GDP; tourism is one of the world’s biggest industries, with direct and indirect contributions of 10% or higher (OECD, 2020). Due to the COVID-19 pandemic’s widespread impact, international tourism has experienced a dramatic decline globally – particularly negatively in tourist-dependent nations – leading the World Travel and Tourism Council estimates of up to USD 800 billion in lost earnings by 2022 (Kreiner & Ram, 202).

India has suffered serious consequences of the pandemic influenza on its tourism sector. Tourism contributed 7% of India’s economy in 2019 but only 4.3% by 2020 – this represents over 40 million lost jobs from this industry alone.

The revival of the tourism sector in India has shown great promise and, if proper steps are taken, can become an indispensable contributor to long-term economic development. Tourism companies should prioritize long-term sustainability by creating products tailored specifically for travellers.

Government support should also include financial assistance for tourism-related businesses by relieving liquidity constraints and making credit more readily available; this will allow them to relaunch operations and expand employment. State tourism packages should be promoted year-round along with enhanced connectivity through airports, heliports, water aerodromes and railways; personal income tax should be reduced to promote consumption while simultaneously increasing disposable income, thereby driving demand growth and tourism expansion.

India should prioritize sustainable tourism development by capitalizing on its diverse geography, cultural traditions and spiritual/philosophical insights. The government can promote medical tourism by offering high-end healthcare services and partnering with private hospitals, investing in tourism-related technologies that make destinations more appealing and competitive among consumer markets, or offering tax breaks to boost medical tourism spending. Tourism is pivotal in emerging economies like India and should be revitalized quickly to meet future demand. By taking these measures, tourism industries will rebound faster from current difficulties while becoming less susceptible to disruptions – aiding development efforts and providing job creation in emerging nations such as India.

Increased Exports

Tourism can directly affect GDP, employment and foreign currency exchange (foreign currency exchange). Tourism has quickly emerged as one of the key pillars of global trade. Economic transformation lies at its heart in its capacity to increase domestic and regional incomes, increase competitiveness, promote innovation and establish global markets for goods and services. In the long term, tourism can improve overall well-being and quality of life around the globe. Tourism was severely reduced during the COVID-19 pandemic; however, its growth is slowly rebounding – prompting governments to implement policies designed to foster its revival – such as encouraging sustainable tourism practices or diversification strategies or using technological solutions as part of recovery initiatives.

Tourism in India has undergone an incredible revival as its rich culture and biodiversity draw visitors from all around the globe. Tourists come for its snow-clad Himalayan Mountains, tropical rainforests and other places of natural beauty; also, Indian cuisine attracts travellers, further increasing demand for travel and hospitality services.

India has taken several measures to promote tourism. From subsidizing airfares and loan guarantees extended to tourism companies to launching the Incredible India digital platform and increasing budget allocation by Rs 5000 crore for tourism development – these have all contributed towards strengthening India’s economy with spending increases related to tourism spending.

Future tourism industry growth seems promising. Travellers from abroad will likely return as nations relax restrictions and revive economies via financial stimulus packages, marketing initiatives and promotional tools. Travellers should practice good hygiene while remaining socially separate to stay safe; clear information policies and reduced uncertainty also support tourism sector recovery; this may become particularly critical if an infectious virus reappears and new travel restrictions may become necessary.

Travel and tourism investment has emerged as a crucial catalyst of worldwide economic development. Contributing to GDP through supporting various industries – airlines, cruise ships, transits, trains and taxicabs; hotels; hostels; homestays/resorts renting rooms out; entertainment venues (amusement parks; casinos; theatres plus retail stores selling souvenirs); accommodation (hotels; hostels/homestays/resorts renting out rooms out) are some of the industries which contribute significantly. Tourism also contributes significantly to agriculture by spurring increased consumption of local products within tourist zones and drawing foreign exchange into economies as tourists spend money locally; tourism employs millions in developing nations while simultaneously fighting poverty; when managed correctly, it may even offer social/environmental advantages.

Tourism’s impact on economies largely depends on various variables, including economic growth and its drivers, fluctuations in growth-influencing factors, and a country’s reliance on tourism for its gross domestic product (GDP) . Tourism remains an indicator worth considering when analysing national growth drivers.

Reviving tourism requires considering multiple variables; economic instability will likely affect demand, and long-term consumer trends may dictate where people travel and the activities they select as tourists. Sustainability will likely become increasingly important when selecting natural and regional tourist spots; shorter travel distances would help conserve natural resources while decreasing pollution emissions from visitors.

To support tourism development, the government has undertaken various initiatives. Adopt a uniform tourism policy across states and form the National Tourism Task Force with state tourism ministers and joint secretary-level officers from relevant central ministries serving on its membership rosters as members. Ministry of Tourism measures also include providing 24/7 toll-free tourist information helplines in multiple languages and an online platform with state-specific year-round tour packages displayed; credit guarantee schemes were set up for COVID-19-affected players while tax reduction/waivers helped further bolster this sector.

What Are the Effects of Tourism and Hospitality on India’s GDP?

Indian tourism and hospitality play an invaluable role in earning foreign exchange earnings, creating jobs, and showcasing India’s cultural richness internationally.

While the Covid-19 pandemic severely compromised travel and hospitality, they have since rebounded with renewed optimism. Here are just a few ways travel and hospitality contribute to India’s GDP: Increase Disposable Income.

Travel and hospitality industries form an indispensable cornerstone of any economy, contributing significantly to income generation, employment of local citizens, foreign exchange earnings, and growth of the local and regional economies.

India is an iconic travel destination renowned for its rich cultures and festivals from across the globe that lure travellers in from every direction. Spiritual tourism has steadily gained momentum within hospitality in recent years – giving Airbnb travellers more options when searching for accommodation solutions.

WTTC research indicates that India’s travel and tourism sector should surpass pre-pandemic levels this year due to robust domestic demand, resilient industry performance and growing interest among millennial travellers. Furthermore, efforts by its government to expand infrastructure development projects and foster e-commerce should help spur further expansion within this industry.

Travel and hospitality create jobs across a range of economic sectors, from hotels to airports, and provide individuals with opportunities to launch their own businesses. This drives greater employment growth by strengthening economic activity overall.

The Indian tourism industry has proven to be an efficient means for creating income and jobs, alleviating poverty and sustainable human development. Tourism also brings foreign exchange earnings domestically while simultaneously improving tax collection efforts, strengthening regional economies and supporting indigenous cultures and traditions.

Oxford Economics released a report showing that Airbnb provides India with new entrepreneurial and investment opportunities by fulfilling visitors’ modern tourist demands for local experiences, cheaper rates, longer stays, sustainable services like resource conservation programs, technology-enabled services, and digital applications. Hospitality entrepreneurs may capitalize on these shifts by adopting green practices into their accommodations while using digital platforms to market them and offer additional guest services such as health and safety protocols for guests’ safety.

Travel and hospitality enormously positively affect India’s GDP, contributing services like air transportation, hotels/resorts/hoteling facilities/leisure activities (festivals/casinos/shops/spaces/theatres, etc.), homestays or rented rooms through platform providers like Airbnb etc.

India was affected by the pandemic disruption, which decreased international travel, consequently increasing domestic tourism twice what had been forecast by the World Travel & Tourism Council over 10 years. Staycations became common within India for rejuvenation purposes, leading to working breaks or luxurious getaways within India more frequently; building of airports & heliports for regional air connectivity took place more frequently while reduced personal income tax rates boded well for long-term growth rates of both outbound tourism and domestic tourism twice that predicted by WTTC over 10 years.

Increased Taxes Tourism contributes both directly and indirectly to India’s GDP: directly in terms of supporting hotels, retail shops, transportation services and entertainment venues, and indirectly through government investments into infrastructure for tourism as well as expenditure by Indians employed within this industry.

Thanks to Airbnb, India’s travel and hospitality sector has experienced steady progress since the end of the COVID-19 Pandemic in 2019. Activity levels have almost returned to pre-pandemic levels across multiple sectors, including travel.

Not all employees within an industry benefit equally from COVID-19’s economic downturn; certain workers such as food-app delivery persons, taxi drivers and Airbnb hosts have seen it particularly hard; hence, it is imperative that policymakers gain insight into its effects on individual income and wages to take appropriate measures accordingly. Difference-in-difference estimation techniques and panel data of earnings of those employed within an industry provide policymakers with vital data sets that allow for just this purpose.

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Gulfood dubai 2023, tourism and hospitality, tourism & hospitality industry in india, the tourism sector is projected to contribute us$ 250 billion to the country’s gdp by 2030, generating employment for 137 million individuals., advantage india, robust demand.

* The Medical Tourism sector is predicted to increase at a CAGR of 21.1% from 2020-27.

* The travel market in India is projected to reach US$ 125 billion by FY27 from an estimated US$ 75 billion in FY20.

* International tourist arrivals are expected to reach 30.5 million by 2028.

* According to WTTC, over the next decade, India’s Travel & Tourism’s GDP is expected to grow at an average of 7.8% annually.

Robust Demand

Attractive Opportunities

* India is geographically diverse and offers a variety of cultures that come with its own experiences, making it one of the leading countries in terms of international tourism expenditure.

* Travel and tourism are two of the largest industries in India, with a total contribution of about US$ 178 billion to the country’s GDP.

* The country’s big coastline is dotted with attractive beaches.

Attractive Opportunities

Policy support

* US$ 2.1 billion is allocated to Ministry of Tourism in budget 2023-24 as the sector holds huge opportunities for jobs and entrepreneurship for youth. Rs. 2,400 crore (US$ 289.89 million) allocated to the Ministry of Tourism as the sector holds huge opportunities for jobs and entrepreneurship for youth.

* Under the Union Budget 2023-24, an outlay of US$ 170.85 million has been allocated for the Swadesh Darshan Scheme.

* 68 destinations/sites have been identified in 30 States/UTs for development under the PRASHAD Scheme as on March 31, 2022.

Policy Support

Diverse Attractions

* According to WTTC, the contribution of India's travel and tourism sector to India's economy was worth Rs. 15.9 trillion (US$ 191.25 billion) in 2022.

Diverse Attractions

Tourism and Hospitality Industry Report

Introduction.

With a total area of 3,287,263 sq. km extending from the snow-covered Himalayan heights to the tropical rain forests of the south, India has a rich cultural and historical heritage, variety in ecology, terrains and places of natural beauty spread across the country. This provides a significant opportunity to fully exploit the potential of the tourism sector.

India being one the most popular travel destinations across the globe has resulted in the Indian tourism and hospitality industry emerging as one of the key drivers of growth among the services sector in India. The tourism industry in India has significant potential considering that Tourism is an important source of foreign exchange in India similar to many other countries.

It is widely acknowledged that the tourist and hospitality sector, which encompasses travel and hospitality services like hotels and restaurants, is a development agent, a catalyst for socioeconomic growth, and a significant source of foreign exchange gains in many countries. India's rich and exquisite history, culture, and diversity are showcased through tourism while also providing significant economic benefits. The consistent efforts of the central and state governments have helped the tourism industry to recover from the COVID-19 pandemic shock and operate at the pre-pandemic level.

tourism and hospitality industry

Market Size

According to WTTC, India is ranked 10th among 185 countries in terms of travel & tourism’s total contribution to GDP in 2019. According to WTTC, the contribution of India's travel and tourism sector to India's economy was worth Rs. 15.9 trillion (US$ 191.25 billion) in 2022.

According to WTTC, over the next decade, India’s Travel & Tourism GDP is expected to grow at an average of 7.8% annually. In 2020, the Indian tourism sector accounted for 39 million jobs, which was 8% of the total employment in the country.

In 2021, the travel & tourism industry’s contribution to the GDP was US$ 178 billion; this is expected to reach US$ 512 billion by 2028. By 2029, it is expected to account for about 53 million jobs. In India, the industry’s direct contribution to the GDP is expected to record an annual growth rate of 7-9% between 2019 and 2030.

The travel market in India is projected to reach US$ 125 billion by FY27 from an estimated US$ 75 billion in FY20. The Indian airline travel market was estimated at ~US$ 20 billion and is projected to double in size by FY27 due to improving airport infrastructure and growing access to passports. The Indian hotel market including domestic, inbound and outbound was estimated at ~US$ 32 billion in FY20 and is expected to reach ~US$ 52 billion by FY27, driven by the surging demand from travellers and sustained efforts of travel agents to boost the market.

Contribution of travel and tourism to GDP

By 2028, international tourist arrivals are expected to reach 30.5 billion and generate revenue of over US$ 59 billion. However, domestic tourists are expected to drive the growth, post-pandemic. International hotel chains are increasing their presence in the country, and they will account for around 47% share of the tourism and hospitality sector of India by 2020 and 50% by 2022.

As per the Ministry of Tourism, Foreign Tourist Arrivals (FTAs) in October 2023 were 8,11,411. FTAs during the period January-October 2023 were 72,43,680 as compared to 46,55,160 in January-October 2022.

The percentage share of Foreign Tourist Arrivals in India during October 2023 among the top 5 ports was highest at Delhi Airport (34.74%) followed by Mumbai Airport (14.75%), Haridaspur Land Check Post (9.03%), Chennai Airport (7.05%), Bengaluru Airport (5.71%). FTAs during the period January-September 2023 were 6.43 million.

The percentage share of Foreign Tourist Arrivals in India during October 2023 among the top 5 source countries was highest from Bangladesh (21.41%), followed by USA (15.65%), UK (11.27%), Australia (4.38%) and Canada (3.81%).

In 2023-24* (January-October), 24.97% of foreign tourists visited for Indian Diaspora which marks 72,43,680 foreigners.

FEE during the period January-October 2023 were US$ 22.32 billion.

Domestic visitor spending increased by 20.4% in 2022, only 14.1% below 2019. International visitor spending rose by 81.9% in 2022, but still 40.4% behind 2019 numbers.

Cumulative FDI equity inflow in the Hotel and Tourism industry is US$ 17.29 billion during the period April 2000-September 2023. This constitutes 2.60% of the total FDI inflow received across sectors.

Investments/Developments

  • In December 2023, IHCL expanded its presence in Maharashtra as it signed a hotel in Bandra, Mumbai. The Brownfield project will be branded an IHCL- SeleQtions hotel.
  • In December 2023, TAJ won the ‘World’s finest luxury grand palaces’ award at the ‘101 Best Executive Summit’ in Germany.
  • In November 2023, Indian Hotels Company (IHCL) announced the opening of Ginger Mumbai, Airport. The 371 Keys flagship Ginger hotel, strategically located near the domestic airport will introduce the brand’s lean luxe design and service philosophy of offering a vibrant, contemporary, and seamless hospitality experience to its guests.
  • In September 2023, Mahindra Holidays & Resorts (MHRIL) signed an MOU with the Government of Uttarakhand (UK) to invest Rs. 1,000 crore (US$ 120.16 million) and build 4-5 large marquee resorts over the next few years in Uttarakhand.
  • An investment of Rs. 2,400 crore (US$ 289.89 million) was allocated to the Ministry of Tourism as the sector holds huge opportunities for jobs and entrepreneurship for youth.
  • An investment-linked deduction under Section 35 AD of the Income Tax Act is in place for establishing new hotels under the 2-star category and above across India, thus permitting a 100% deduction in respect of the whole or any expenditure of capital nature.
  • In 2019, the Government reduced GST on hotel rooms with tariffs of Rs. 1,001 (US$ 14.32) to Rs. 7,500 (US$ 107.31) per night to 12% and those above Rs. 7,501 (US$ 107.32) to 18% to increase India’s competitiveness as a tourism destination.
  • In Union Budget 2023-24, US$ 290.64 million was allocated to the Ministry of Tourism as the sector holds huge opportunities for jobs and entrepreneurship for youth in particular and to take the promotion of tourism on mission mode, with the active participation of states, the convergence of government programmes and public-private partnerships.
  • An app will be developed covering all relevant aspects of tourism. States will be encouraged to set up Unity Malls in State Capital as the most prominent tourism centres to promote One District One Product, GI products, handicrafts and products of other States.
  • In 2021, Government of India announced 40,000 e-tourist visas out of 500,000 free regular visas to the tourist, to ensure a geographical spread of the incentive to important source markets globally.
  • Government of India has set a target to create 220 new airports by 2025.
  • The Emergency Credit Line Guarantee Scheme (ECLGS) covered through a liberal definition of MSME (micro small and medium enterprises) has been expanded to include tourism and hospitality stakeholders. Infrastructure status has been granted to exhibition-cum-convention centres.
  • A separate liquidity window of Rs. 15,000 crore (US$ 1.8 billion) has been released for the sector.
  • A total of 48,775 accommodation units (both classified and unclassified) have been registered on the National Integrated Database of Hospitality Industry (NIDHI) portal and 11,220 units have self-certified for SAATHI standards in September 2022.
  • In October 2022, Indian Hotels Company (IHCL) announced the launch of its new Indian-concept restaurant brand, Loya. Debuting at Taj Palace, New Delhi, Loya captures the culinary essence traversing the landscape of North India.
  • Hospitality unicorn OYO has acquired Europe-based vacation rental company Direct Booker for US$ 5.5 million in May 2022.
  • Accor, a French hospitality major will expand its India's portfolio by adding nine additional hotels in the mid-scale and economy categories, bringing the total number of hotels 54 in India.
  • The Medical Tourism sector is expected to increase at a CAGR of 21.1% from 2020-2027.
  • India was globally the third largest in terms of investment in travel and tourism with an inflow of US$ 45.7 billion in 2018, accounting for 5.9% of the total investment in the country.
  • Indian government has estimated that India would emerge with a market size of 1.2 million cruise visitors by 2030-31. Dream Hotel Group plans to invest around US$300 million in the next 3-5 years for the development of the cruise sector in India.
  • India is the most digitally advanced traveller nation in terms of digital tools being used for planning, booking, and experiencing a journey. India’s rising middle class and increasing disposable income has supported the growth of domestic and outbound tourism.
  • The United Nations World Tourism Organisation selected Pochampally in Telangana as one of the best tourism villages in November 2021.

Government Initiatives

The Indian Government has realised the country’s potential in the tourism industry and has taken several steps to make India a global tourism hub. Some of the major initiatives planned by the Government of India to boost the tourism and hospitality sector of India are as follows:

In the Union Budget 2023-24, US$ 290.4 million has been allocated to the Ministry of Tourism. Under the Union Budget 2023-24, an outlay of US$ 170.85 million has been allocated for the Swadesh Darshan Scheme to develop a complete package of 50 tourist destinations for providing a wholesome tourism experience by facilitating physical, digital and virtual connectivity, availability of tourist guides and tourist security.

Ministry of Tourism has sanctioned 76 projects under the scheme since its inception under 13 themes for a revised sanctioned cost of US$ 668.95 million and has released US$ 534.9 million (till December 31, 2021).

Under Budget 2023-24, the Government has allocated US$ 30.25 million for the development of tourist circuits under PRASHAD. Since its launch in January 2015 and Ministry has sanctioned 37 projects in 24 states with estimated expenditure of US$ 146.4 million and a cumulative amount of US$ 91.6 million has been released for these projects. 68 destinations/sites have been identified in 30 States/UTs for development under the PRASHAD Scheme as on March 31, 2022.

Ministry of Tourism has partnered with the Quality Council of India (QCI), to assist the Hospitality Industry in their preparedness to continue operations safely and mitigate risks arising out of the COVID-19 pandemic through an initiative called SAATHI (System for Assessment, Awareness and Training for Hospitality Industry). A hotel/unit goes through the SAATHI framework and agrees to fully follow the requirements wherever applicable possible, and a self-certification is issued. Self-certified Hotel/units attend webinars to clarify doubts through live interactions. If Hotel/unit desires, they may undertake site-assessment based on SAATHI framework through QCI accredited agencies and an assessment report with opportunities for improvement is shared with the assessed unit.

Under this Loan Guarantee Scheme for Covid Affected Tourism Service Sector (LGSCATSS), loan upto US$ 12,110 will be extended to each Tour Operators/ Travel Agents/ Tourist Transport Operators approved/recognized by the Ministry of Tourism.

Guarantees for Skill Development Loans by the member banks of IBA up to Rs. 1.5 lakh (US$ 1,801) extended by lending institutions to eligible borrowers without collateral or third-party guarantee.

  • Visa reforms include a significantly expanded Golden Visa scheme, a five-year Green residency and new entry permits, including one for job seekers. The new system also offers additional benefits to sponsor family members
  • To ease travels for international tourists, the Government of India has launched a scheme wherein five lakh tourists will get free visas.
  • In August 2022, Ministry of Tourism sanctioned 76 projects for Rs. 5,399.15 crore (US$ 678.39 million) under Swadesh Darshan Scheme for development of tourism infrastructure in the country.
  • In June 2022, the Ministry of Tourism along with Associations of Indian Universities (AIU) initiated a 12 episode webinar series under ‘Azadi Ka Amrut Mahotsav’ (AKAM) to engage and expose young minds of our country to the rich and diverse heritage of the country.
  • Till the end of September 2022, a total of 155 Dekho Apna Desh webinars have been organized by Ministry of Tourism.
  • The Ministry of Tourism has launched the National Strategy for Sustainable Tourism and Responsible Traveller Campaign in June 2022.
  • From November 15, 2021, India allowed fully vaccinated foreign tourists to visit India, which in turn will help revive the Indian travel and hospitality sector.
  • In November 2021, the Ministry of Tourism signed a Memorandum of Understanding (MoU) with Indian Railway Catering and Tourism Corporation to strengthen hospitality and tourism industry. The ministry has also signed a MoU with Easy My Trip, Cleartrip, Yatra.com, Make My Trip and Goibibo.
  • In November 2021, the Indian government planned a conference to boost film tourism in the country with an aim to establish domestic spots as preferred filming destinations. This move is expected to create jobs and boost tourism in the country.
  • In September 2021, the government launched NIDHI 2.0 (National Integrated Database of Hospitality Industry) scheme which will maintain a database of hospitality sector components such as accommodation units, travel agents, tour operators, & others. NIDHI 2.0 will facilitate the digitalisation of the tourism sector by encouraging all hotels to register themselves on the platform.
  • Government is planning to boost the tourism in India by leveraging on the lighthouses in the country. 71 lighthouses have been identified for development as tourist spots.
  • The Ministry of Road Transport and Highways has introduced a new scheme called ‘All India Tourist Vehicles Authorisation and Permit Rules, 2021’, in which a tourist vehicle operator can register online for All India Tourist Authorisation/Permit. This permit will be issued within 30 days of submitting the application.
  • The Indian Railway Catering and Tourism Corporation (IRCTC) runs a series of Bharat Darshan tourist trains aimed at taking people to various pilgrimages across the country.
  • During 2019-20, an additional fund Rs. 1,854.67 crore (US$ 269.22 million) was sanctioned for new projects under the Swadesh Darshan scheme.
  • Ministry of Tourism sanctioned 18 projects covering all the North Eastern States for Rs. 1,456 crore (US$ 211.35 million) to develop and promote of tourism in the region under Swadesh Darshan and PRASHAD schemes.
  • Statue of Sardar Vallabhbhai Patel, also known as ‘State of Unity’, was inaugurated in October 2018 and the total revenue generated till November 2019 stood at Rs. 82.51 crore (US$ 11.81 million).

State Government Initiatives

  • In Jammu and Kashmir, in April 2021, a mega tourism promotion event “Tapping the Potential of Kashmir: Another Day in Paradise” was organised in Srinagar. The event aimed to showcase the myriad tourism products of Jammu & Kashmir and promote tourism in the region as the destination for leisure, adventure, eco, wedding, films and MICE tourism steps have been taken by the government to provide better facilities to the old.
  • The strategy of Uttarakhand Tourism is to identify key originating regions and tourist segments, which would then be the focus of marketing campaigns.
  • Madhya Pradesh tourism board has opened the door for private investment within the state by providing all the aid and facilities to the investors.
  • The AP Tourism Development Corporation (APTDC) plans to establish 100 kiosks across the state in the first phase, providing employment opportunities to the youth.
  • In October 2021, the Tripura government collaborated with Infovalley Educational & Research (P) Ltd. as part of a public-private partnership (PPP) to run the State Institute of Hotel Management (SIHM). Through the SIHM, the government aims to empower the youth and contribute to the growth of hotels and hospitality management in the state.
  • The Ministry of Tourism sanctioned three projects for a total amount of Rs. 179.68 crore (US$ 24.24 million) under the Swadesh Darshan scheme in Gujarat. The Ministry of Tourism has approved 16 projects for over Rs. 1,300 crore (US$ 171.2 million) in India's North East under the “Swadesh Darshan” Scheme.
  • In July 2021, the Tamil Nadu state government decided to implement an integrated mega tourism plan, which included new lighting arrangements for the Thiruvalluvar statue at Kanyakumari, starting renovations at Poompuhar tourist spot and improving roads leading to tourist spots, spiritual places and adventure tourism spots. It also includes unveiling a new tourism policy, establishing more hotels, resorts, and convention centres and increasing contribution of public and private sectors in the tourism sector.
  • In July 2021, Andhra Pradesh Tourism Authority urged stakeholders in the tourism sector in the state to register with the Andhra Pradesh Tourism under the Tourism Trade Registration and Facilitation Guidelines 2020.
  • Jharkhand Tourism Policy Offers Attractive Incentives and Opportunities for Investors.
  • Nagaland Launches Initiatives to Promote Off-Road Tourism

Staycation is seen as an emerging trend were people stay at luxurious hotels to revive themselves of stress in a peaceful getaway. To cater to such needs, major hotel chains such as Marriott International, IHG Hotels & Resorts and Oberoi hotels are introducing staycation offers were guests can choose from a host of curated experiences, within the hotel. India’s travel and tourism industry has huge growth potential. The industry is also looking forward to the expansion of e-Visa scheme, which is expected to double the tourist inflow in India. India's travel and tourism industry has the potential to expand by 2.5% on the back of higher budgetary allocation and low-cost healthcare facility according to a joint study conducted by Assocham and Yes Bank.

It is irrefutable that the tourist industry is becoming a more significant economic force and has the potential to be used as a tool for development. The tourist industry not only drives growth, but it also raises people's standards of living with its ability to provide significant amount of diverse employment opportunities. It promotes environmental preservation, champions diverse cultural heritage, and bolsters international peace. By 2028, Indian tourism and hospitality is expected to earn US$ 50.9 billion as visitor exports compared with US$ 28.9 billion in 2018.

India's travel and tourism industry

Note: *in US$ terms

Note: Conversion rate used in November 2023, Rs. 1 = US$ 0.012

References: Media Reports, Ministry of Tourism, Press Releases, Department for Promotion of Industry and Internal Trade (DPIIT), Press Information Bureau (PIB), Union Budget 2023-24, Economic Survey 2022-23

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States with Largest Domestic Tourist Arrivals in 2021

  • Uttar Pradesh
  • Andhra Pradesh
  • Maharashtra

Tourist Spots in India

Industry Contacts

  • Department of Tourism
  • Palace on Wheels
  • Hotel Association of India
  • Federation of Hotel and Restaurant Associations of India

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COVID-19 has hit India's nascent green tourist sector hard. Our partner's new research suggests ways to recover sustainable prosperity

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The inherent nature of capital means that it is cheap for the rich and expensive for the poor, hence it is always scarce for SMEs. This scarcity of capital is even more problematic for innovative new sectors such as eco-tourism...

The tourism sector is a vital part of India’s economy and an important source for investment, business, and employment opportunities, contributing about 7% of total GDP in 2019. Tourism also benefits other related sectors like transport, handicrafts, food processing, and others, creating job opportunities, income, and local government revenue.

The vulnerabilities of the tourism sector

But this important sector has been hit hard by COVID-19. Almost 80% of the travel and tourism sector is made up of micro and small enterprises, making them especially vulnerable to disruptions in demand and income.

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In India employment generation from the tourism sector has fallen from 12.75% in 2019 to 8.0% in the current year (Ministry of Tourism, 2020). Moreover, the Indian Himalayan Region, a strong tourist asset of India, is amongst the most fragile ecosystem on earth and thus experiencing increased frequency of extreme events.

The region is responsible for providing water to a large part of the Indian subcontinent and is known for its unique centres of cultural and biological diversity , but is susceptible to population pressure, global climate change, natural hazards, and rapid loss of habitat and genetic diversity. This is an increased risk to the lives and livelihoods of the communities in the region.

The urgent need for today is to utilise our natural resources sustainably with a focus on minimising their depletion and pollution. At the same time, it is important to note that the welfare of human society and is directly linked to the sustainable use of natural resources. Ecotourism thus has gained widespread acceptance in the tourism industry all over the country and mountain tourism has been identified as one of the fastest-growing sectors in the recent past.

Himalayan homestay3

The states of Himachal Pradesh and Uttarakhand have recognised eco-tourism as having the highest potential for the economic development of the region and have initiated different ecotourism activities for livelihood creation as well as conservation and protection of the fragile ecosystem of the Himalayan region. However, Ecotourism is identified as a niche tourism area that is mainly popular amongst adventure/nature/wildlife enthusiasts. Thus, Ecotourism SMEs have faced many challenges.

The challenges mentioned here are based on case studies undertaken by Development Alternatives in Himachal Pradesh and Uttarakhand, which found that the ecotourist sector needs to chalk out a recovery plan incorporating challenges and perspectives of SMEs including rural communities, tour operators, agents, and upcoming responsible tourism startups.

The top 5 challenges faced by ecotourism SMEs

  • Lack of public infrastructure and inadequate marketing support from the government: Making any destination commercially viable requires good public infrastructure and a proper marketing strategy. However, the benefits of development and good marketing are unevenly provided. Himachal Pradesh which falls in Indian Himalayan Region is heavily dependent on tourism as an avenue for livelihood generation as it is blessed with a wide range of magnificent snow-capped mountains. However, the distribution of tourists’ arrival across its 12 districts is highly uneven.
  • Violation of rules and regulations and illegal practices - A huge chunk of homestays and hotels are unregistered, leading to poor management of natural resources, greenwashing of ecotourism-based enterprises, and disputes within the industry. A huge chunk of businesses operate without license, authorization, and skills making it difficult to monitor sustainability criteria. A formal accreditation system for tourism enterprises would enable high-quality operators to succeed and provide quality assurance to customers as well.
  • Poor implementation of Homestay schemes and Credit Guarantee Trust Fund for Micro & Small Enterprises (CGT SME) - Financial institutes are much more likely to lend to large businesses than small ecotourist enterprises. Underdeveloped districts tend to face a finance gap from formal institutes due to low tourist arrival, meaning that locals from underdeveloped districts like Chamba and Mandi tend to migrate to major tourist hubs like Kullu in search of work and income. Major tourist hubs like Kullu-Manali, Mussoorie are now facing the brunt of overexploitation of natural resources and exceeding their actual carrying capacity.
  • The low financial footprint for the tourism sector- Initiatives taken by the government for the tourism sector mostly revolve around developing infrastructure to support tourism in India. The sector also needs backing from the government to support the operational cost of tourism SMEs as well which will ease the process of accessing finance from formal institutes.
  • Insufficient financial aid and limited scope of policy: The Himachal Pradesh Homestay Scheme was launched in 2008 to promote rural tourism and sustainable livelihoods, providing a subsidy of USD 106 to set up a homestay. However, the real cost of setting up a Homestay is much higher, covering basic infrastructure like rooms and toilets, furniture, and decoration. Current schemes must be expanded to include tax reduction for ecologically and culturally responsible businesses, which will enable individuals to invest more in the tourism sector and also develop a less-standardized, culturally rich tourism ecosystem in the country.

Himalayan Tourism Graph1

The way forward

Going digital can go some way towards addressing these problems. Firstly, it is affordable and secondly, it is the fastest way for local communities to connect with the world. Partnering with digital startups and established businesses such as Airbnb and NotOnMap, and using marketing tools such as video tours to offer a firsthand view of the experience being offered to potential customers. To boost other sources of revenue such as rural arts & crafts and food products partnership with e-commerce is highly recommended. This would enable the local entrepreneurs in reaching out to the wider market and advertising the homestays and other tourism services.

The government has taken initiatives to recognize the service sector in the new definition of MSME, removing the distinction between manufacturing and service-based MSMEs (India Today, 2020). With the revised definition of MSMEs, the tourism sector has been recognized as a service sector. It can now avail the same benefits being given to manufacturing businesses for quite a long time.

However, this alone is not sufficient. Government schemes must move beyond incentives for homestay construction and should include schemes for private individual investment into homestays through personal tax benefits. It has been observed on the ground that people are motivated to join the unconventional tourism bandwagon, but structural constraints and vulnerability to failure restrict the entrepreneurial spirit. Currently, the financial footprint of government schemes is very low for SMEs and needs to be more inclusive, thus garnering benefits for the local communities and the tourism sector.

- Tanya Issar , Deputy Manager (Policy and Planning), Development Alternatives

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Bibliography

Economic Times. (2021, May). View: Travel, tour after stepping out again . Retrieved from Economic Times: https://economictimes.indiatim...

India Today. (2020, May 13). New definition of MSMEs and how it is different from earlier . Retrieved from India Today: https://www.indiatoday.in/busi...

Ministry of Micro Small and Medium Enterprises, GoI. (2020). Annual Report 2020-21. Retrieved from msme.gov.in: https://msme.gov.in/sites/defa...

Ministry of Tourism. (2020). Annual Report 2019-2020. New Delhi: GOVERNMENT OF INDIA.

Press Information Bureau, Government of India. (2020). Retrieved from 1. Press Information Bureau, Government of India. (2020). Ministry of Micr https://www.pib.gov.in/PressRe...

State Himachal Pradesh. (2020). Himachal Pradesh Statistical Abstract 2018-2019 Report. Himachal Pradesh: Himachal Pardesh Government. Retrieved September 28, 2021, from https://himachalservices.nic.i...

Tribune India. (2021, January 9). Why Himachal homestays mean business . Retrieved from Tribune India: https://www.tribuneindia.com/n...

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  • Business travel expenditure in India estimated at USD 38.2 billion in 2024

India is the 9th largest travel market in the world for business travel spending. It is the 4th largest market for the Asia Pacific region, representing 5.7 per cent of business travel spending in the region. In 2023, India’s business travel spending grew 24.7 per cent and we anticipate an 18.3 per cent increase in spending in 2024.

tourism and economy in india

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  • Updated On Mar 4, 2024 at 03:50 PM IST

tourism and economy in india

South Asia's swift tourism recovery to aid Indian inbound by 2026; arrivals to increase by 58%: Expert

Under both mild and severe scenarios, it is projected that by the end of 2024, South Asia will attract 25 million and 60 million visitors, respectively. On the other end, India's attractiveness to tourists is expected to improve by 2026. Prof Haiyan Song, Research Head at PATA, and Dean of Hospitality and Tourism at Hong Kong Polytechnic University shares more insights.

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  • Published On Mar 4, 2024 at 03:50 PM IST

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India's economy grows at its fastest pace in six quarters in election boost for Modi

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  • "If you look at the GDP numbers ... India's poised for about 8% growth this year, that makes India easily the fastest growing economy in the world" — Krishnamurthy Subramanian, executive director at the IMF and former chief economic advisor of India.
  • India's economy grew much faster than expected in the October to December quarter, data showed late on Thursday.

India is 'easily' the fastest growing economy in the world, IMF executive director Krishnamurthy Subramanian said, as the country's third-quarter GDP growth blew past analysts' estimates.

At 8.4%, India's economy expanded at its fastest pace in six quarters, data showed late Thursday, on strong private consumption and upbeat manufacturing and construction activity. Reuters estimates had pegged growth in the October to December period at 6.6%.

"If you look at the GDP numbers ... India's poised for about 8% growth this year," Subramanian, who is also a former chief economic advisor to the Indian government told CNBC's " Squawk Box Asia " on Friday.

The Indian government also raised its GDP growth outlook for fiscal year 2023-24 to 7.6% from 7.3% forecast earlier.

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IMF executive director: India is the world's 'fastest-growing economy'

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Subramanian said he expected similar fiscal prudence from the full union budget, which will be released after India's general elections.

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The GDP data has boosted Prime Minister Narendra Modi's economic record ahead of a highly anticipated national election.

"For PM Modi and BJP [Bharatiya Janata Party] who will be going to the polls in April-May, it will yet provide another boost. For RBI [Reserve Bank of India], the strong growth momentum will only reinforce their bias to stay on hold at 6.5% for the foreseeable future," Commerzbank analysts wrote in a note.

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Visa waivers, special deals: The global rush to woo the Indian traveller

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Tourism boards are keen to court India with simplified visa processes, local campaigns on television and digital platforms and with influencers on social media.

This surge in interest comes as India's outbound tourism market looks lucrative with a projected CAGR of 11.4% between 2023 and 2032. Image: Pixabay

New Delhi: International tourism boards are vying for a slice of the growing Indian travel market, easing visa procedures, launching targeted marketing campaigns, and offering special deals to attract the affluent Indian traveller. 

This surge in interest comes as India's outbound tourism market looks lucrative with a projected compound annual growth rate (CAGR) of 11.4% between 2023 and 2032 to reach $44.8 billion, according to a report by Nangia Andersen 'Outbound Tourism in India. It stood at $15.16 billion in 2022.

Tourism authorities are keen to court Indian travellers and businesses, with international boards visiting the country, hoping to garner new business. They are introducing simplified visa processes, launching local campaigns on television and digital platforms and tapping influencers on social media.

Mint spoke to half a dozen tourism boards, including those from Hong Kong, and Saudia Arabia who said they are making efforts to recover to their pre-pandemic visitor levels. This is not surprising given that Indian tourists have been a significant source of revenue for neighbouring countries and even for those further away. 

About 27 million Indians travelled abroad in 2019, before the pandemic, the report added. Over 20 million travelled overseas in 2022 with the UAE, Saudi Arabia and the US being the top foreign destination for Indian tourists in the year. 

Thailand, Sri Lanka, and Malaysia are competing with each other for the attention of Indian tourists this travel season by adopting visa-free entry policies. Thailand initiated the trend by waiving visa requirements for Indian travelers in November 2023, allowing a 30-day stay until May 2024. Sri Lanka followed suit with visa-free access to Indian visitors and nationals from six other countries, valid through the end of March 2024. Malaysia joined the fray, announcing visa-free entry for both Indian and Chinese citizens starting December 2023. 

Meanwhile, Hong Kong, seeking to diversify its tourism base beyond mainland Chinese travelers, is considering launching an advertising campaign targeted at Indian tourists. "The Indian traveller profile is changing, and we see that in the spends on travel, they make now. It is a very important market for us. While it is not in our top five markets, it is in the top five most important markets for meetings and incentive travel. This is why we are contemplating a television and OTT advertisement here soon," Puneet Kumar, director, South Asia, and Middle East at Hong Kong Tourism Board told Mint.

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COMMENTS

  1. Tourism Industry in India

    Tourism and Hospitality, as one of India's largest service industries, plays an extraordinary role in driving the nation's growth and prosperity. The Tourism and Hospitality sector is an integral part of the Make in India initiative, serving as a vital economic catalyst that fuels job creation and rapid development.

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    Table 2.11.1 Foreign Exchange Earnings from Tourism in India 70 during; 1991, 2001 & 2011-2021 Table 2.11.2 Month-wise FEE from Tourism (Rs. Crore) in India 71 during, 2019 -2021 Table 2.11.3 Month-wise FEE from Tourism (US$ Billion) in India 72 during, 2019-2021 Chapter-3 World Tourism Scenario and India 75 3.1 World Tourism Traffic 77

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  10. India Tourism Statistics 2022 (Revised)

    Website Content Managed by Ministry of Tourism, Government of India Designed, Developed and Hosted by National Informatics Centre ( NIC ) Last Update : 01-03-2024Ministry of Tourism, Government of India Designed, Developed and Hosted by National Informatics Centre ( NIC ) Last Update : 01-03-2024

  11. Impact of travel and tourism industry on the Indian economy

    The Foreign Exchange Earnings (FEEs) through tourism in India for the years 2019 to 2021 is ₹ 2,11,661cr in 2019, ₹50,136cr in 2020 and ₹65,070cr in 2021," the ministry informed the Upper House. The increased FTA (Foreign Tourist Arrivals) will certainly increase the potential of foreign exchange income and foreign investment in India ...

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    the economy. Tourism in India has created gradually over the long time. Tourism being the interaction between the tourists and the host societies, not only the socio-economic conditions of host communities change, but also their value system improves (Cook et al., 2010; Kumar & Kumar, 2014). Hall & Page (1999) clarified that

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  25. Business Travel In India: Business travel expenditure in India

    Business Travel In India: India is the 9th largest travel market in the world for business travel spending. It is the 4th largest market for the Asia Pacific region, representing 5.7 per cent of business travel spending in the region. In 2023, India's business travel spending grew 24.7 per cent and we anticipate an 18.3 per cent increase in spending in 2024.

  26. India GDP: The world's fastest-growing big economy is living up to its

    The IMF projects the economy to grow by 6.5% in the fiscal year starting April 1. "Robust 8.4% GDP growth…shows the strength of Indian economy and its potential," Modi said on X Thursday ...

  27. India's economy grows at its fastest pace in six quarters in election

    India's economy grew at its fastest pace in one-and-half years in the final three months of 2023, led by strong manufacturing and construction activity and bolstering Prime Minister Narendra Modi ...

  28. India 'easily' fastest growing economy, IMF director says, as GDP

    India's poised for about 8% growth this year, that makes India easily the fastest growing economy in the world" — Krishnamurthy Subramanian, executive director at the IMF and former chief ...

  29. Visa waivers, special deals: The global rush to woo the Indian ...

    This surge in interest comes as India's outbound tourism market looks lucrative with a projected compound annual growth rate (CAGR) of 11.4% between 2023 and 2032 to reach $44.8 billion, according ...

  30. Why Saudi Arabia banks on tourism to turn a service economy

    Tourism is the catalyst for a lot of other industries to flourish as well," he adds. With an ambitious target set for the year 2030, Saudi Arabia aims to bring in 150 million visitors in the next 6 years with an eye on India wherein for 7.5 million visitors at least.