India’s tourism and hospitality industry has emerged as one of the country’s most crucial development engines in the services sector. Given the country’s rich cultural and historical legacy and the diversity of ecology, terrains, and natural beauty spots, tourism in India has considerable potential. Like in many other countries, in India, tourism is a significant source of foreign exchange. From 2016 to 2019, foreign exchange earnings climbed at a CAGR of 7%; however, because of the COVID-19 pandemic, earnings fell in 2020.
In FY20, India’s tourism sector employed 39 million people, accounting for 8.0 percent of the country’s overall workforce. It is estimated to employ almost 53 million people by 2029.
According to the World Travel and Tourism Council, India placed 10th out of 185 nations in total contribution to GDP from travel and tourisms in 2019. In 2019, travel and tourism contributed 6.8% of the entire economy’s GDP or Rs. 13,68,100 crore (US$ 194.30 billion).
What is the Situation in the Industry?
It is predicted that contributions to India’s GDP will be $512 billion by 2028 and 53 million employment by 2028.
The travel and tourism industry contributed US$ 121.9 billion to GDP in 2020. Between 2019 and 2028, India’s industry’s direct contribution to GDP is predicted to expand at a pace of 10.35 percent per year.
India’s tourism and hospitality industry will earn $50.9 billion in tourist exports by 2028, up from $28.9 billion in 2018. By 2028, international visitor arrivals are predicted to exceed 30.5 million.
From an estimated US$ 75 billion in FY20, India’s travel market is expected to grow to US$ 125 billion by FY27. In FY20, India’s tourism sector employed 39 million people, accounting for 8.0 percent of the country’s overall workforce. Between April 2000 and June 2021, the hotel and tourist sector received a total of US$ 15.89 billion in FDI.
Expansion of India’s Foreign Tourist Industry
VISA facility for E-Tourists
E-visas are now available in 171 countries and are divided into five categories:
- E-Tourist visas
- E-Business visas
- E-Medical Visas
- E-Medical Attendant Visas
- E-Conference Visas
Construction of Infrastructure
Developing destinations, circuits, megaprojects, and rural tourism infrastructure projects receive more than half of the Ministry of Tourism’s budget.
Medical tourism is a growing trend
Treatment at a low cost, a high-quality healthcare infrastructure, and highly qualified doctors also play a significant role.
In 2018, India ranked third in the world in terms of travel and tourism investment, with a total inflow of US$ 45.7 billion, accounting for 5.9% of the country’s overall investment.
Between April 2000 and June 2021, the hotel and tourist sector received a total of US$ 15.89 billion in FDI.
According to the Indian government, by 2030-31, India will have a market of 1.2 million cruise travellers. In the next 3-5 years, Dream Hotel Group expects to invest roughly $300 million in developing India’s cruise industry.
India’s Ministry of Tourism signed a Memorandum of Understanding (MoU) with the Indian Railway Catering and Tourism Corporation to strengthen the hospitality and tourism industry. The ministry has also signed an MoU with EaseMyTrip, Cleartrip, Yatra.com, Make My Trip, and Goibibo. The Ministry of Tourism has drafted a proposal titled ‘National Strategy and Roadmap for Medical and Wellness Tourism.’ Seventy-one lighthouses have been identified for development as tourist spots. Seven hundred twenty-five homestay owners from Darjeeling, Kalimpong, and Dooars were trained in marketing, sales, and behavioural skills.
The Indian Railway Catering and Tourism Corporation (IRCTC) runs a series of Bharat Darshan tourist trains to take people on various pilgrimages across the country. The Ministry of Tourism developed an initiative called SAATHI (System for Assessment, Awareness & Training for Hospitality Industry) by partnering with the Quality Council of India.
The following are the government’s accomplishments in 2019-20:
- Under the Swadesh Darshan scheme, an additional budget of Rs. 1,854.67 crores (US$ 269.22 million) has been sanctioned for new projects in 2019-20.
- Under the Swadesh Darshan and PRASHAD programs, the Ministry of Tourism sanctioned 18 projects totalling Rs. 1,456 crores (US$ 211.35 million) to enhance and promote regional tourism.
- The ‘State of Unity’ statue, popularly known as Sardar Vallabhbhai Patel, was unveiled in October 2018, and the total revenue generated through November 2019 was Rs. 82.51 crores (US$ 11.81 million).
Get on the road
Staycations are an emerging trend in which individuals stay at opulent hotels to de-stress in a relaxing environment. Major hotel chains such as Marriott International, IHG Hotels & Resorts, and Oberoi Hotels are launching staycation deals that allow visitors to choose from various personalized experiences within the hotel to meet these needs.
The travel and tourism business in India has enormous growth potential. The tourism industry is also anticipating the expansion of the e-Visa scheme, which is estimated to treble the number of visitors to India. According to a joint study undertaken by Assocham and Yes Bank, India’s travel and tourism business have the potential to grow by 2.5 percent as a result of increased budgetary allocation and low-cost healthcare.